Gold stages a relief rally after the Fed announces a 3/4% rate hike
As anticipated the Federal Reserve concluded the July FOMC meeting with an announcement that they will raise rates by 75 basis points or 3/4%. While this was overwhelmingly expected as opposed to a larger 1% rate hike, there were subtle changes in the statement as well as comments made by Chairman Powell during the press conference.
A change in the Chairman's tone
In essence, for the first time in any press conference this year, the chairman expressed a slightly more dovish tone than previously expressed regarding rate hikes. While he continued to toe the line that all future decisions will be data-dependent, he added for the first time since the Fed began to raise rates that the Federal Reserve feels it is 'likely appropriate to slow increases at some point. That being said, he offered no real insight as to a timeline of when this might occur.
With the second quarter GDP report coming out tomorrow and advanced estimates by the Atlanta Federal Reserve predicting an economic contraction of 1.6%, Chairman Powell put a spin on the current economic outlook.
"I do not think that the U.S. is currently in a recession, and the reason is there are just too many areas of the economy that are performing too well. To be sure, growth is slowing for reasons that we understand. Growth was exceptionally high last year, 5.5%. We would have expected growth to slow. There's also more slowing going on now."
The chairman did add that preliminary GDP numbers should be taken with a grain of salt.
Gold reacts with positive price gains and the dollar weakens
Gold traded to a low of $1709.10 in overseas trading before the release of today's report. Gold began to gain strength immediately following the release of the report and strengthened as Powell spoke during the press conference. Gold futures basis the most active August contract traded to a high of $1739.60.
As of 4:43 PM, EDT August gold is currently fixed at $1733.10 a net gain of $15.40 or 0.90%. Concurrently, the dollar declined in value today giving up 0.68% or 0.729 points with the dollar index currently fixed at 106.315.
Tomorrow the financial markets will react to the latest numbers on the second quarter GDP, this will be the next opportunity for traders to factor in the most recent data about the current strength of the economy. The Federal Reserve will not hold another Open Market Committee meeting until November 2 which means that there will be additional PCE and CPI inflation reports to determine their future forward guidance.
This will allow market participants to factor in additional reports as they become available into current pricing without the added pressure of upcoming rate hikes by the Federal Reserve.
Entrepreneur Spotlight – Using Politics To Your Advantage
Reading The Signs
We are midway through 2022. Dependant on your viewpoint and reflections of the last two years, and now that lockdowns and related restrictions have been removed, you may be hoping that we have come through a ‘global pandemic’ and can now pick up the pieces of life with the intention of getting back to some sense of normality over time.
If you were one of those who thought this was all about the money, mass surveillance and control, nothing which unfolded would have surprised you. You may have been observing this within the context of the World Economic Forum’s long held desire to perform a great global reset.
There were so many things that troubled me, particularly how critical thinking and debate were suppressed. No longer were the populace encouraged to think with an open and critical mind. We were told what to think.
Dr Robert Malone and Dr Geert Van Bosche are two examples. Both are vaccine creators, not anti-vaxxers, yet they called for the immediate cessation of the experimental jabs pending further enquiry due to what their research uncovered. Significant suppression of the natural immune system was one of the findings.
They were ignored and vilified. This was a big indication of a nefarious agenda, because the nature of truth is that it always welcomes debate and enquiry. It does not hide.
Incompetence or Beyond?
So what is the political weather forecast looking like today? What have we learned from the last two years? Did the government act well in the interest of health? Was error, incompetence or corruption at play? Is the war really about one country against another or is it something else?
It is difficult to make the case for incompetence when the same patterns of behavior keep repeating. For example, the CDC has just confirmed that they did not take into account VAERS [Vaccine Adverse Events Reporting System] in their analysis!
As I write this article many papers and conversations have been declassified over in the USA, and the process continues. It seems that history is repeating itself in certain ways.
In 2019 a tabletop simulation exercise around the release of a respiratory virus resulted in the ‘CV-19 pandemic’. In March 2021 a tabletop simulation exercise revolved around the monkeypox, and now we have the alleged occurrence of the monkeypox virus. [see page 8]
At the same time the BBC got caught out again resurrecting old photos of monkeypox and overlaying them in the main news, as if they were current. They also did this for the Ukraine-Russia conflict.
Picture Source: BBC
That is the same BBC that was found guilty in court many years ago of misrepresenting certain facts, by reporting the collapse of the World Trade Center building 7, more than 20 minutes before it collapsed. Video evidence was produced by Tony Rooke. The video has been removed from YouTube.
CNN were caught on camera in an underground initiative by Project Veritas, acknowledging the deliberate exaggeration of covid case numbers as part of a fear and propaganda strategy to get more viewers, not to mention their paymasters.
They added that the next target for fear and propaganda would be climate change. Yet the government and media project disinformation onto those who question them. It was just another example underlying that the media are not into independent journalism.
There is a report out directing that all UK airports should shut within 10 years, and the rationale given is climate change with none other than Neil Ferguson’s name popping up again.
True to form, in the UK Easyjet is canceling around 10,000 flights across the summer, Gatwick are canceling flights, and we are in the middle of major train strikes countrywide.
Several countries have triggered more emergency measures, among them are Italy, Australia, Denmark, Germany, Netherlands. Ecuador has recently declared a state of emergency, as the indigenous people rise in protest.
I would suggest that the real war seems to be the Global Elite versus We The People, rather than one country versus another. I would further suggest that it goes deep to the heart and soul of sentient beings, the war to stop you thinking for yourself, living from the heart in service to mankind.
Its roots go back a long way, and that is an article for another day. For now, how do you as individuals and entrepreneurs proceed moving forward? Let’s explore this.
In a world where deception, destruction and coercion have become rife, I believe there is always opportunity in times of challenge and adversity, to turn things around for the benefit of mankind. In doing so it can turn what appears to be a very rough storm into a perfect storm.
I would invite you to view current reality as a mirror and use it to mirror or reflect back the opposite of all that is not good being played out. I share some examples from my experience of what that might look like. Add or edit it for your situation.
Replace Blame With Responsibility
It's so easy to get stuck in blame mode, and while it may feel justified, what is more important is to take responsibility in how you move forward with what you know. Focus on the solutions that you can be a part of.
Be A Force For Good | Innovate
Instead of recycling the destructive forces at play out there, reflect peace and honor for what you believe. Show love and care in the way you go about your business, so that social distance can be replaced with heart and soul connection.
If ever there was a time to innovate or bring radical change, it is now, and it needs brave and present entrepreneurs to do so, in order to build on different values. There are some great examples of this already going on, which you can be a part of.
Markethive of course, is one such example, creating an ecosystem for the entrepreneur that is safe and honoring of free speech, while combining a social network with an inbound marketing platform for you to develop and hone your marketing skills in business.
One Small Town is another example of a global movement to put new structures in place that are based on values of sharing, kindness and compassion, designed to make these nefarious structures obsolete.
The opportunity is there to become part of the solution, rather than waiting to be rescued. If innovation feels like a bridge too far, bring it back home to something more simple. Evaluate yourself and your business to see where you can reflect the changes you wish to see in the world.
Be Honest and Transparent
Where have you given your power away and compromised against your better judgment? Have you buried your head in the sand out of fear? Are there mistakes which need correcting?
Be willing to look with honesty at yourself and acknowledge where you may have fallen short of your own standards in business, and resolve to raise your game. Forgive yourself and resolve to be a better version of yourself.
Rebuild Trust
Trust toward government and businesses across were already hitting new lows before 2020 as indicated by the Edelman Trust Barometer Report in 2017. I wonder what the results would be today.
The advent of the blockchain will help to restore trust and transparency but on its own it is not enough. Learn to build trust again, not just in your abilities and expertise, but also in all your professional relationships, including how you conduct yourself in the process of business.
Look after Your Health
Health has been shoved in our faces in a ‘one size fits all’ manner. If your health is vulnerable right now, down tools and take the time to nurture it and strengthen your natural immune system. It does not have to cost money.
Learn to breathe slowly and deeply to oxygenate your system. Walk and be with nature, expose yourself to some natural vitamin D. Keep yourself well hydrated. Dehydration is a common cause of fatigue.
Health is more than just the physical stuff. Learn to take inventory of your mind and emotions. Take time to feed your mind so it can support your health. I recently read Emile Coue’s book ‘Self Mastery Through Conscious Autosuggestion’.
It is a simple and powerful read, especially when you apply it. Affirm that which you wish to be true but learn to embody those positive affirmations in practice for them to take root and shape your life.
Evaluate Your Business
Be willing to take a step back and evaluate where you are in life and business, especially if you suffered losses in business. What have you achieved that you can be grateful for in spite of your losses?
If you need a structure for evaluation there are tools like a PESTLE. This looks at the Political, Economic, Social, Technological, Legal and Financial factors which influence business.
Put one foot in front of the other with your action plan. It's better to do a few things well than a lot of things superficially. Restore depth of thinking and quality to become more accomplished.
Informed Consent
Replace coercion with empowerment through informed consent. Where your products and services are concerned make sure you walk your prospects through the plus and minuses of what you have to offer.
Allow yourselves and others their freedom of thought and expression. Let others know they can speak freely in your presence without fear. Then they can make an informed decision, and determine if it is ‘the glove that fits the hand’ rather than to be subjected to an aggressive marketing campaign with no substance, with forced solutions thrust upon them.
Show Courage and Develop Inner Strength
Do not give into fear. Believe in your gifts and abilities, and dare to keep expressing them, no matter what. There is nothing to be gained by living below the level of what you are capable of. Mankind needs to be raised up by your gifts and abilities, not kept down.
These are some of the many things I have been cultivating further in response to what is going on in the world. It doesn’t necessarily need 7 billion people to bring about a massive change. It starts with you.
Even if a small percentage focuses on the change outlined above, we can restore our planet from a warring planet to a more peaceful and prosperous one. Instead of cowering in the face of global adversity we can use what we see to mirror the opposite and allow it to cause us to rise. It is time for the rise of the entrepreneur.
If not you, who? If not now, when?
That is a narrative which we can create and a script that we can write.
About: Anita Narayan. (United Kingdom) My life's work is about helping individuals to greater freedom through joy and purpose without self-sabotage, so that inspirational legacy can serve generations to come. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.
Gold prices remain under pressure as U.S. consumer confidence falls to 95.7
Gold prices are struggling to push into positive territory as pessimism grows among U.S. consumers, further raising fears of a potential recession.
American consumer confidence index fell to 95.7 down from June's reading of 98.7, the U.S. Conference Board reported Tuesday. Economists were expecting to see the index at 97.3.
According to economists the sharp drop in consumer sentiment could have a major impact on consumption and weigh on the economy heading into year end.
The gold market is seeing some renewed momentum following the data. August gold futures last traded at $1,716.60 an ounce, down 0.16% on the day.
The report said that the drop in consumer optimism was due to a decline in the Present Situation Index, which fell to 141.3, down from June’s reading of 147.2. At the same time the Expectations Index dropped to 65.3, down from June’s reading of 65.8.
Lynn Franco, senior director of economic indicators at The Conference Board, pointed out that the Expectations Index suggests recession risks continue to grow.
“Concerns about inflation—rising gas and food prices, in particular—continued to weigh on consumers,” said Franco. “As the Fed raises interest rates to rein in inflation, purchasing intentions for cars, homes, and major appliances all pulled back further in July. Looking ahead, inflation and additional rate hikes are likely to continue posing strong headwinds for consumer spending and economic growth over the next six months.”
Gold prices start the week down despite weak USD, silver prices down 2%
Gold investors appear hesitant to jump into the precious metal even as the U.S. dollar starts the week on a soft note.
According to some analysts, the Federal Reserve's impending monetary policy decision this week has pushed many investors and traders to the sidelines. According to the CME FedWatch Tool, markets see a more than 77% chance of a 75-basis point move. Although the prospect of a 100-basis point move is effectively off the table, analysts have said that gold continues to struggle as the Federal Reserve expects to reiterate its hawkish positioning for further aggressive rate hikes in the fall.
August gold futures last traded at $1,718.50 an ounce, down 0.5% on the day. Although some analysts expect gold has room to run higher this week, it will remain at the mercy of the U.S. dollar, which could see new momentum following the central bank's monetary policy decision.
Currency analysts at Brown Brothers Harriman said that they remain bullish on the U.S. dollar even as it sees three days of consecutive losses.
"We are not yet ready to change our strong dollar call. Yes, the U.S. economic data have been weakening, but we do not think a recession is imminent. When all is said and done, we believe the U.S. economy remains the most resilient. However, we expect a period of consolidation ahead for the dollar until the U.S. economic outlook becomes clearer," the analysts said in a note.
Commodity analysts at TD Securities have said that despite some shifting sentiment in the marketplace, gold faces a uphill battle. The analysts said that gold prices need to push above $1,775 an ounce to threaten the current downtrend.
Will gold survive another 75 basis point hike
Although gold continues to struggle in the shadow of the Federal Reserve, it remains one of the best-performing assets in the precious metals space and is significantly outperforming silver prices.
September silver futures last traded at $18.26 an ounce, down nearly 2% on the day. The gold/silver ratio is trading at a fresh two-year high above 93 points. Analysts have said silver will continue to struggle due to growing recession fears. Industrial demand accounts for 60% of silver demand and analysts point out that weak economic growth will lead to lower demand for silver.
In a recent interview with Kitco News, Christopher Vecchio, senior market analyst at DailyFX.com, said that because of the strong U.S. dollar, he prefers to play gold in a pair trade with silver. He added that he is long gold and short silver and expects the grey metal to continue to underperform.
However, some analysts are optimistic that silver can find some footing in a strong gold market.
"Silver is still trying to figure out what it wants to do around long-term support area between $18 to $19," said Fawad Razaqzada, market analyst at City Index. "But the lack of follow-thru has frustrated both the bulls and bears alike. Given gold's lead, the risks are skewed to the upside for silver."
As cryptocurrencies continue to attract the attention of regulators and investors, some analysts have suggested that Bitcoin could become legal tender in many countries very soon. This proposal argues that Bitcoin is similar to traditional currencies such as US dollars or Euros. So it should be possible to enter the mainstream market as a means of payment and a store of value in the same way paper money does now.
However, several significant differences between the two types of assets make this an extremely complicated task, not least because they are subject to entirely different sets of rules (and their associated risks). In the UK and US, where Bitcoin is a form of payment, the government has been more cautious about regulating it than most other jurisdictions.
Anthony Scaramucci, the founder of Skybridge Capital, expects more countries to adopt bitcoin alongside national and international currencies.
He said:
"I think Bitcoin will be used by many Latin American countries as legal tender over time, not just El Salvador, but other countries,"
El Salvador introduced bitcoin as legal tender alongside the US dollar last September. In January, El Salvador's President Nayib Bukele predicted that two more countries would adopt Bitcoin as the legal tender this year, Bitcoin.com reported. Devere Group CEO Nigel Green indicated that three countries would adopt bitcoin as legal tender this year in January.
Meanwhile, Alex Hoeptner, CEO of crypto derivatives trading platform Bitmex, said last October that five countries would accept bitcoin as legal tender by the end of 2022.
Scaramucci also believes that Bitcoin could reach $500,000 per coin in the long run, according to Bitcoin.com. In addition, he expects that by the end of 2025, there will be more than 1 billion wallets containing Bitcoin, and the number of users will reach 250 to 3 billion in the next decade.
"If it gets there, then I think the maturing asset could be a conversation about whether it acts as an inflation hedge," he said.
A Brighter Future Awaits Cryptocurrency
The digital currency landscape is changing, according to a new research paper from Economist Impact commissioned by Crypto.com. The Economist Impact examines how much consumers trust digital payments and what barriers exist to digitalizing essential monetary functions.
Comparing consumer attitudes to similar surveys in 2020 and 2021, they found that cryptocurrencies and central bank digital currencies (CBDCs) are now at the crossroads of credit cards and payment apps.
Economist Impact shared its findings on July 6, 2022, in a PDF file titled Digimentality 2022 – Fear and Favoring of Digital Currency. They surveyed 3,000 people, half of whom came from developed economies such as the United States and the United Kingdom, and the other half from developing countries such as Brazil and the Philippines.
14% prefer CBDC, a significant increase from 4% in 2021. Interestingly, 37% of consumers expect their government or central bank to make cryptocurrencies legal tender within the next three years, and about one-third of consumers expect CBDC adoption.
Notably, more than 60 central banks are at various stages of CBDC development. China and Sweden have already launched live pilots, according to the 2021 CBDC Global Index by professional services firm PwC.
Skepticism Amidst the Unstable Market and Looming Recession
There is a great deal of skepticism about the future of cryptocurrencies amidst a bear market and looming recession. Some believe that cryptos are nothing more than an overvalued fancy that will eventually crash. In contrast, others remain convinced that they have the potential to revolutionize how we pay for goods and services. However, regardless of people’s individual opinions on cryptocurrency’s long-term prospects, it remains clear that this technology has captured the attention of many investors and enthusiasts across the globe.
In the current state of the market, there is a lot of speculation and few true believers. As a result, the price of most cryptos is in a downward trend, and this will likely continue into the future. Meanwhile, the economy is heading towards a significant recession, likely dampening interest in digital currencies even more.
In the long term, crypto may eventually succeed for several reasons, but it will happen much slower than many belief. First of all, even if the value of the cryptocurrency is rising fast, several factors limit its real value in the market. The value of Bitcoin depends on how many people use it as a currency.
The number of exchanges is limited, and they have to be closed down or bankrupted by regulators; governments can block access to their country, as has happened with China and Russia. Finally, the high volatility of the crypto market means that investors need to accept huge losses or gains; this could be enough to turn off potential customers.
Acceptance of Digital Money Despite Setbacks
Digital money is seen as a more secure and efficient way to conduct transactions. Consumers feel confident in using digital money because it eliminates the need for physical currency, which can be lost or stolen. Additionally, consumers believe digital currencies are protected from fraud and malicious activities. Although the current bear market may have impacted consumer confidence in digital currencies, this does not appear to have dampened their enthusiasm for them overall.
Soon, blockchain technology will be widely adopted by businesses of all sizes. They will increasingly rely on smart contracts to automate and streamline business processes such as: fulfilling customer orders and ensuring the timely delivery of products and services. It’s a significant development for the financial industry, which has been slow in adopting new technologies due to the complexity of legacy systems and the risk of disruption to existing revenue streams should the wrong changes occur during integration with new methods. Blockchain-based solutions will accelerate the adoption of new technologies across other industries, including the healthcare and insurance sectors and supply chain management.
In conclusion, the adoption of cryptocurrencies will continue to grow, and we expect to see more mainstream companies adopting blockchain solutions and services. This is a trend that will accelerate over the next few years as more industries adopt cryptocurrency-based technology for their operations and products, and more merchants accept cryptocurrencies on their websites and in stores using mobile apps or point-of-sale systems.
About: Prince Chinwendu. (Nigeria) Rapid and sustainable human growth is my passion, and getting a life-changing opportunity into the hands of people is my calling. Empowering entrepreneurs provides me with enormous gratification. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.
Every bear market ends, and a bull market begins with a short covering rally. Whether you use fundamental or technical analysis, the end result is the same with a change of direction. Since the March peak, Platinum has been trending lower for four months and is finally showing signs of a potential bottom. Thursday's trading range helped create the right shoulder of an inverse head and shoulder pattern. The consolidation over the past four trading sessions has created a flag that has helped accelerate prices through the 21-day moving average. To help you identify additional long-term support and resistance levels, we created a Free "5-Step Technical Analysis Guide that will provide you with all the Technical analysis steps to create an actionable plan used as a foundation for entering and exiting the market. You can request yours here: 5-Step Technical Analysis Guide to Gold.
Daily Platinum chart
Blue Line Futures correlation matrix
I wanted to share one of the slides I keep pinned on my desktop and will help you to understand how connected the precious metals are to the underlying currencies. On Thursday, the ECB raised rates by 50 bps for the first time in 11 years while rolling out the "Transmission Protection Instrument." That action created volatility across both the currencies and precious metals. TPI is a flexible bond-buying program that tames volatility as the ECB raises rates. Call this strategy bullish and bearish at the same time.
Commitment of traders
Every week the CFTC releases the commitments of traders report to help the public understand the dynamics of the market. Diving into the report, we can see that managed money and hedge funds have been short Platinum. We can also see that large speculators in Silver have taken their long exposure down to levels not seen in years, given the $8 sell-off since March. For the second time in history, we saw managed money go net short on Gold. The first time was 2015, which marked the low in Gold, and the second was in 2018, and from that point, Gold went into a multi-year bull market.
Daily Silver Chart
Daily Gold Chart
Our strategy and trend reversal points
We remain bearish, taking tactical shorts on U.S equities on any significant bounce targeting the Nasdaq and Russell 2000. The leveraged stocks that make up these indices are most at risk during a recession. We also maintain our bearish stance on crypto and traditional currencies such as the British Pound, Euro, and Yen. We are also bearish and targeting economically sensitive commodities such as Cocoa, Corn, and Soybeans on bounces. We maintain a bullish stance on China as it continues stimulating its economy. Crude Oil should remain firm in the front months while weakening over time as we get deeper into the recession. One of the most popular precious metals questions I fielded this week was, "at what levels will the "bearish trend" shift to "bullish/neutral"? Those levels are $1787 for August Gold, $3.82 for September Copper, $903.1 for October Platinum, and $20.20 for September Silver. If we see closes above these levels, you can expect the short covering to accelerate into outright longs. Any new positioning should be in December 2022 or into 2023 on futures contract purchases. If you have never traded Silver futures, we completed a new educational guide that answers your questions on transferring your current investing skills into trading "real assets," such as the 1000 oz Silver futures contract. Additionally, you will receive a free two-week trial to our flagship report, "The Morning Express," giving you critical levels of support in resistance in the Gold and Silver. You can request yours here: Trade Metals, Transition your Experience Book.
There are a few different visions for how the financial world should evolve. Most of us dream of a future where we can be independent and free. On the contrary, some institutions are vehemently opposed to such liberty. The 'powers that be' will never allow us to be free, as eliminating their control would mean cutting their puppet strings.
Central banks are among the most prominent financial puppeteers in the world. The Bank for International Settlements (BIS) is like a member’s club for the central banks, and for the last two years, the BIS has been attacking all forms of cryptocurrency, trying to fault the decentralized system.
However, the cronies at the BIS have been some of the greatest advocates for central bank digital currencies (CBDCs). They have been planning their vision of a future that would radically alter the financial system, verging on the dystopian. Recently, they released their latest report on this vision for the future monetary system.
There is a quote that seems to have become the narrative of the crypto industry;
‘First, they ignore you, then they laugh at you,
then they fight you,
and then you win.’
It could be that crypto has entered the 3rd phase of the quote and is blatantly obvious in the rhetoric of the anti-crypto institutions, like the BIS, detailed in its report of a dystopian vision of the future of finance. It also documents a flawed and somewhat naive view of the crypto industry.
What is the BIS?
The Bank for International Settlements or BIS is the self-described bank for central banks. The BIS is owned by the 63 central banks that make up its membership and is based in Basel, Switzerland. The BIS's job is to help Central banks coordinate their monetary policies. An informational video by the BIS revealed that all 63 Central Bankers recently met in Basel to discuss monetary policy. A sporadic occurrence that only happens during times of Crisis.
The BIS has been working closely with central banks to develop their CBDCs, and CBDCs will make it possible for them to have total control over the economies of their respective countries by determining how and when money can be spent. It’s important to note that CBDCs are being built from the ground up to maximize financial control.
In contrast, most cryptocurrencies were created from the ground up to maximize financial freedom and, in some cases, financial privacy. It’s no surprise that the BIS is not a fan of cryptocurrency whatsoever and that the report summary in this article can be summarized in one sentence. According to the BIS, everything that cryptocurrency can do, CBDCs can do better.
The report was formulated by Hyun Song Shin, the economic advisor and head of research. Hyun is as anti-crypto as they come and attended a media briefing about cryptocurrency for the BIS in 2018. He talked about why cryptocurrencies will never replace fiat currencies because they can't scale and don't guarantee transaction finality; the ‘laugh at you’ part of the quote mentioned above.
He did another media briefing about cryptocurrency in early June 2022, specifically about this report. He talked about why CBDCs are better than cryptocurrencies, a considerable shift in tone from four years ago, and the ‘fight you’ part of the quote above. At the media briefing, Shin was asked some critical questions about CBDCs by reporters, to which he had no clear answer.
One reporter asked why are CBDCs necessary when we have alternatives? A second asked about people's privacy concerns about CBDCs, given that the BIS had specified that privacy will not be possible with CBDCs and that the central bank will keep all user data.
A third reporter asked whether CBDCs would see any adoption given their concerning characteristics. A fourth reporter asked whether someone would be blocked from buying the likes of alcohol and tobacco or entirely blocked if they speak out against their government.
Even though he couldn’t answer the reporters’ questions, he clarified and applauded that CBDCs problematic programmability could theoretically be applied to any payment system, providing a government successfully rolls out a digital ID.
BIS REPORT: The Future Monetary System
The BIS report begins with a brief introduction that describes the financial system as it functions today. In short, it states central banks issue the money and creates trust in it, whereas commercial banks make it possible for people to use that money to buy, sell and borrow.
If the idea that it's the central bank that creates the trust in money wasn't bad enough, the authors claim that “private sector innovation benefits society, precisely because it is built on the strong foundations of the Central Bank.”
To add insult to injury, the following sentence reads, “the monetary system with the central bank at its center has served society well.” This statement is highly debatable given that central bank money printing has made life even more unaffordable for the average person while enriching the 1%.
After briefly describing cryptocurrencies, the authors turned to Terra’s recent collapse as evidence that crypto can't beat the central banks. They claimed that the crypto industry constantly needs a “nominal anchor” such as fiat-denominated stablecoins.
They believe the only solution to this crypto dilemma is to switch everything over to permissioned blockchains run by central banks with CBDCs and so-called fast payment systems that commercial banks will leverage the same way they leverage the central banks today.
What Do We Want From A Monetary System?
The second part of the BIS report is titled, “What do we want from a monetary system?” It's important to remember that this report is intended to be read by powerful individuals and institutions, not the average person. So the authors aren't really asking what we want; they’re asking their wealthy and influential cronies.
Below is a table the authors provided that identifies eight monetary system goals. These are safety and stability, accountability, efficiency, inclusion, control over data, integrity, adaptability, and openness. It would seem that all eight of these can be rolled into one, and that's total control.
These boxes explain how well these eight “wants” are satisfied by the current financial system, cryptocurrency, and the BIS’s dystopian vision of the future of finance. Given that the BIS is the author and creator of this table, it’s no surprise that crypto fails on almost all metrics, whereas the BIS’s future system succeeds on all eight.
This ties into the third part of the BIS report, which relates to cryptocurrency problems. Not surprisingly, the authors have no shortage of crypto criticisms, and they start with all the volatility in the crypto market and the fact that most cryptos are down more than 90% from their all-time highs.
Of course, the authors don't explain the reason why crypto is so volatile and that its implicit goal is to replace the financial system, which is a massive undertaking. The authors also don't acknowledge that the volatility of most major cryptocurrencies has been on the decline over the years.
The authors seem to imply that crypto can't replace central banks because their blockchains are fragmented. Meaning they can't interoperate, which just isn't the case. Most crypto holders know the industry will be multi-chain, and interoperability innovation has been explosive.
They highlight that new cryptocurrencies are pretty centralized, and many existing cryptocurrencies have started to centralize to increase their speed and competitiveness. The authors then turn to decentralized finance. Notably, there’s growing awareness that the central banks and commercial banks alike see Defi as the biggest threat because it has the potential to play both of their roles.
Because centralized exchanges somehow fall under the umbrella of Defi, the authors list a few critiques of them, too, including the lack of transparency around crypto holdings, a lack of oversight compared to regular exchanges, and the fact that they let you withdraw your crypto.
The Financial Action Task Force (FATF), whose so-called recommendations aim to make self-custody next to impossible by labeling anyone who tries to hold their own crypto as high risk because they believe only the banks are allowed to preserve your assets, comes to mind.
Regarding the “structural limitations of crypto,” the authors argue that cryptocurrencies are incentivized to keep their fees high because it's the only way they can adequately compensate miners and validators. This is an interesting albeit flawed argument.
This is an argument that Hyun Song Shin made in his first media briefing about cryptocurrency in 2018. He and the authors of this report fail to realize that economic incentives and self-interest are why anyone does anything at all, ultimately.
While it's true that there are risks associated with securing a cryptocurrency blockchain, there are even more considerable risks related to giving control of the financial system to a small group of central bankers. And crypto’s inherent value is increasing as people start to realize this.
In the graph below, the results of a crypto study conducted by the BIS found that “a rise in the price of Bitcoin is associated with a significant increase in new users, i.e., the entry of new investors, with a correlation coefficient of more than 0.9. It analyzes the age and gender of users, exogenous shocks, and risk factors, which could convince the reader that crypto is dangerous.
The authors proclaim that “regulatory action is needed to address the immediate risks in the crypto monetary system and to support public policy goals.” These regulations the authors want to see include;
Regulators to crack down on stablecoins, especially decentralized stablecoins, which is no coincidence, given that stablecoins compete directly with all kinds of fiat currencies as per the BIS’s own admissions.
Cryptocurrency exchanges that hide transacting parties' identities and fail to follow basic know your customer (KYC) and other FATF requirements should be fined or shut down.
Regulators should consider restricting retail access to certain altcoins, banning Defi, and even crack down on crypto oracles like Chainlink for daring to provide data to decentralized applications without approval from the government.
Regulators should ensure that cryptocurrency doesn't become too big as it could compromise the integrity of the fiat financial system. To that end, the authors advised that regulators focus on the centralized entities in cryptocurrency, be they exchanges, custodians, or otherwise.
Because crypto is global, the authors even call on governments to create a new international regulatory authority and present the BIS as the ideal institution to play this role.
The authors also revealed that the BIS is developing a “cryptocurrency and defi analysis platform” that combines on-chain and off-chain data to produce vetted information on market capitalization, economic activity, and international flows. They concluded the crypto section of the report with;
“Overall, the crypto sector provides a glimpse of promising technological possibilities, but it cannot fulfill all the high-level goals of a digital monetary system. Central Bankers can provide such foundations, and they are working actively to shape the future of the monetary system.”
BIS Vision: Four Roles Of Central Banks
The report explains the central banks' four specific roles in the BIS's eyes. These are;
Issue Money
Provide Transaction Liquidity
Ensure Liquidity (also known as money printing)
Assist In Regulations
According to the BIS, the future of finance takes the four roles of the central bank to the next level by introducing Wholesale and Retail CBDCs. Select individuals and institutions will use the wholesale CBDCs, whereas the average person will use retail CBDCs.
Essentially, we will have two systems, and the BIS is OK with that because, as far as it is concerned, “central banks are mandated to serve the public interest” and are totally not influenced by politics or influential individuals and institutions in the private sector.
The authors then outline the different components of their vision of the future of finance and highlight concepts like programmability, composability, tokenization, interoperability, instant payments, open platforms, and inclusive designs. Wait a minute… It sounds like they’re describing the future of cryptocurrency!
The image below displays the metaphor they use to explain their vision of the future of finance. They paint a picture of trees with central banks as the trunk, showing how all the different central banks will lock branches, calling it the Forest of the Global system.
It seems a bit ironic as the report simultaneously claims that a fragmented financial system of this kind would never work. The authors also commented that putting central banks at the center of the financial equation is a “prerequisite for private innovation that serves the public interest,” which seems to imply that private innovation is incapable of serving the public interest in the absence of central banks.
Wholesale CBDCs
Regarding wholesale CBDCs, the authors note that they can be used to govern the inner workings of the financial system and promise their audience, which is again primarily powerful individuals and institutions, that their privacy will be protected, thanks to zero-knowledge proof—also used in the cryptocurrency industry.
The authors also described how a wholesale CBDC would be used to settle a digital currency transaction that’s not done in a retail CBDC. They gave someone buying a house with privately issued eMoney with the deed automatically transferred as an example. They suggested that “the same system could also allow for digital representations of stocks and bonds.”
In other words, they would be tokenizing all real-world assets on their permission blockchains. Some would argue that if this happens, the central bank and, by extension, the government would own your assets. They would be able to revoke your ownership of anything and everything. And if you don't have physical evidence that it was once yours, you will have no way of proving to anyone that it ever was.
People in crypto communities that understand crypto know that buying and holding cryptocurrency in your own wallet is the way to circumvent this, as no one can take it away from you.
Retail CBDCs
There’s no need to worry just yet because the next section of the BIS report talks about the real problem for us; the retail CBDC. It points out the mass adoption of Brazil's fast payment system as proof that the average person will voluntarily adopt a retail CBDC, even though the BIS’s own research shows that only 4-12% of adults in developed countries would voluntarily adopt a retail CBDC.
The authors also applaud the Federal Reserve Bank of Boston's milestone of reaching 1.7 million transactions per second in its CBDC trials, noting that this is faster than payment networks like Visa and cryptocurrency blockchains.
It seems the authors conveniently forgot about Bitcoins Lightning Network, which can process an estimated 40 million transactions per second.
So, if you're wondering, how will the central banks convince anyone to adopt this? The authors clearly state that by allowing non-bank entities to offer CBDC wallets, they can also overcome the lack of trust in financial institutions that holds back many individuals in today's system.
In other words, central banks will use private companies that people trust to roll out their retail CBDCs. This is funny, considering the authors spent the earlier part of the report trying to convince the reader that the central banks and their financial systems are the pinnacles of trust.
What's even funnier is that the BIS actually reported on how much people trust the financial system. The figure is only around 60% in developed countries and possibly even lower now.
The authors then reiterate what's been said in other BIS reports about the privacy of retail CBDCs, stating that “central banks have no commercial interest in personal data and can thus credibly design systems in the public interest.” Put simply, privacy for them but not for us. They also quote that transactions would not be recorded on a public blockchain visible to all.
If all of this wasn't bad enough, the authors discuss a global “multi CBDC platform” that the world's central banks will govern in the following subsection. And the cherry on top is that the privacy of these entities will be insured, so the public will have no idea who controls this powerful system.
Although these statements are made in the context of a wholesale CBDC, the authors make sure that the reader knows that the same global platform could be put in place for retail CBDCs and similar types of digital currencies.
BIS Report Conclusion
The authors conclude by briefly commenting on the progress being made on the BIS’s explicitly stated goals and list the following statistics,
90% of central banks are exploring CBDCs.
Three retail CBDCs are currently live
28 CBDCs in development
Sixty countries are working on Fast Retail Payments.
This list includes the United States Federal Reserve’s plans to roll out the “FED NOW” fast payment system in 2023. It will have many of the same qualities as a retail CBDC, especially if the US government manages to roll out a digital ID system as per Shin’s remarks in his media briefing.
Meanwhile, France and Switzerland are working on a multi-CBDC platform, as are Singapore, Malaysia, Australia, South Africa, Hong Kong, Thailand, China, and the United Arab Emirates.
“In sum, central banks are working together to advance domestic policy goals and to support a seamlessly integrated global monetary system with concrete benefits for their economies and end-users.”
And because the authors still need to bash crypto and drive home the conclusion,
“Instead of serving society, crypto and defi are plagued by congestion fragmentation and high rents, in addition to the immediate concerns about the risks of losses and financial instability.”
This statement might be the most hypocritical of the report because many central banks are testing their CBDCs using cryptocurrency blockchains.
What Does This Mean for Crypto?
So, the big question is, what does all this mean for the crypto market? Many believe this news is insanely bullish for crypto because nobody is buying into the BIS’s “BS” except the central bankers.
Other previous BIS reports could be considered shamelessly evil, and the average individual and institution would not adopt this technology voluntarily. The only way you could convince the average individual and, or institution to adopt this technology would be through force or a crisis, and, conveniently, there's no shortage of those these days.
It's also fascinating how the authors hold up the central banks as the center of the universe and how they are willingly or unwillingly unable to acknowledge just how fast innovation in crypto has been. Four years ago, the BIS laughed at crypto. Now, it's starting to fight it. Does this mean that crypto will win in four years' time?
Let's just say that it's interesting that this is around the time we would see the next crypto bull market top. This obviously doesn't mean that fiat currencies will be defeated in four years, but it could mark the tipping point where crypto adoption becomes so widespread that it genuinely can't be stopped.
Editor and Chief Markethive: Deb Williams. (Australia) I thrive on progress and champion freedom of speech. I embrace "Change" with a passion, and my purpose in life is to enlighten people to accept and move forward with enthusiasm. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.
This information is provided for informational purposes only. Nothing herein shall be construed as financial, legal, or tax advice.
The gold market is ending a five-week losing streak and while sentiment appears to be shifting, some analysts say that the precious metal still faces a challenging environment next week.
August gold futures are looking to end the week with a more than 1% gain, last trading at $1,721.40 an ounce.
All eyes will be on the Federal Reserve next week as markets expect the U.S. central bank to raise interest rates by another 75 basis points. Some currency analysts have said that while the U.S. dollar has fallen from its recent 20-year highs, the Federal Reserve's aggressive stance will continue to support the greenback.
"Amid a backdrop of a hawkish Fed and slowing global growth, we think the dollar will resume its broad-based strength before long," said economists at Capital Economics in a report Friday.
Marc Chandler, managing director at Bannockburn Global Forex, said that while gold prices have room to move higher next week, the central bank's decision could limit gains.
"Not only will the Fed most likely hike by 75 basis points, but it will also signal it is not done with the adjustment. I imagine gold will struggle near $1750 and the 20-day moving average is just above there [$1,752]," he said.
However, some analysts see the Federal Reserve's tightening cycle as having less impact on the U.S. dollar and financial markets. Currency analysts at T.D. Securities see Wednesday's decision as more neutral for the greenback as the market has priced in a lot of hawkishness.
"This meeting carries far less weight compared to the last two and the bar seems high to drastically shift the landscape in F.X. tactically. That said, we see little reason for USD resilience to be undermined, even though we see little reason for it to surge higher from this meeting," the analysts said.
Faced with growing recession concerns, some analysts have said that the Federal Reserve could be closer to the end of its tightening cycle, which will be outright bullish for gold.
PIC
Is the bottom in? Gold could see a bullish correction, bouncing off $1,700 – Moor Analytics
"Gold prices are rising as global recession fears are resetting rate hiking expectations for all the major central banks. Gold is starting to act like a safe haven as weakening economic growth will force many central banks to abandon their aggressive tightening plans," said. "Edward Moya, senior market analyst at OANDA. "Gold might find resistance at the $1750 level, but if it doesn't, not much will get in the way until the $1800 level."
Friday, preliminary data from S&P Global Market Intelligence shows that activity in the U.S. manufacturing and service sectors dropped to their lowest level in two years. The drop in activity reflected a similar weakness in Europe.
"The market is sensing that the rate hiking cycle will end sooner because of rapidly slowing growth. Friday's U.S. services PMI was shockingly soft and means the Fed will pause around 3% and is likely to cut in 2023. When those cuts truly come into view, gold will surge on USD weakness," said Adam Button, chief currency strategist at Forexlive.com.
Thursday, markets will be anxiously waiting to see if the U.S. has fallen into a technical recession following the release of the first reading of second-quarter GDP. Many economists have dismissed first-quarter weakness as a trade imbalance; however, data from the Atlanta Federal Reserve, shows GDP contracting 1.6%, matching the decline in the first quarter. The traditional definition of a recession is two quarters of consecutive declines.
Last week Bank of America said that they see the U.S. falling into a mild recession by the end of the year.
Another European crisis
Along with the Federal Reserve's monetary policy decision, analysts have also said that they will be watching the ongoing geopolitical uncertainty that is unfolding in Europe. Thursday, Italy fell into political turmoil after Prime Minister Mario Draghi resigned following the collapse of his national unity government. The nation is expected to hold snap elections in the fall.
At the same time, economists are continuing to digest the European Central Bank's announcement of its Transmission Protection Instrument. The program will be used to buy bonds from members of the eurozone to make sure all yields are in line and avoid any fragmentation risks.
John Hathaway, Portfolio Manager of Sprott Hathaway Special Situations Strategy, said in an interview with Kitco News, that Europe could be close to a sovereign debt crisis as the central bank continues to expand its balance sheet.
"Gold prices could easily push back above record highs if there is any crisis in foreign exchange markets," he said. "The next black swan out there will be connected to unruly F.X. markets."
Christopher Vecchio, senior market analyst at DailyFX.com, said he also sees a growing risk of a sovereign debt crisis in Europe. He added that in this environment, both gold and the U.S. dollar will benefit.
"As long as there are concerns about the euro, there is room for gold and the U.S. dollar to both trend higher," he said.
Data to watch
Other economic data economists will be watching next week include consumer confidence from the U.S. Conference Board, pending home sales and personal income and spending data.
Tuesday: Consumer Confidence, New Home Sales,
Wednesday: Durable Goods Orders, Pending Home Sales, FOMC decision and statement
Thursday: Advance Q2 GDP, Weekly Jobless Claims
Friday: Personal Consumption, Person Income, PCE Inflation
A Newcomer’s Perspective On Toxic Bitcoin Maximalism
by Boomer
Toxic Bitcoin Maximalism can serve an important purpose to ward off newcomers from scams and altcoins, but is there a time when the toxicity is too much?
This is an opinion editorial by Boomer, a long-time and active member of the financial independence/retire early (FIRE) movement and a contributor for Bitcoin Magazine.
For context, I read it a few days after Nic Carter’s “situation” really exploded on Twitter, and Strolight’s article really resonated with me. To be clear, I have a great deal of respect for Carter and all the good work he’s done for the Bitcoin community, especially the work he’s done to debunk the energy fear, uncertainty and doubt out there. Like him or hate him, he really is one of the most important voices Bitcoin has in the energy and mining space. Over the past few weeks, he’s been taking it on the chin from many people in the community for investments in “blockchain” and “crypto” companies through his venture capital investment firm, Castle Island Ventures. In his defense, he’s been very transparent about his investments in these projects, talking about them quite openly on his “On The Brink” podcast for at least a year. In retaliation to the criticism, Carter has written a few articles and appeared on a few podcasts where he’s punched back at the critics, calling out a vocal group in the Bitcoin space known as “toxic Bitcoin Maximalists” or derogatorily “toxic maxis.” I don’t intend to go over exactly what was said about him or what he said back, but the whole thing has gotten pretty ugly. In this humble pleb’s opinion, it feels childish. It might be a symptom of the bear market that people in Bitcoin are turning on each other, or maybe it’s the Bitcoin immune system doing its job.
Over the past week, I’ve been thinking about what the terms “toxicity” and “maximalism” mean to me. I’ve purposely held back from reading too much on the topic because I want to make sure that I get to my conclusions on my own, but I know that there have been quite a few pieces on the topic recently. Pete Rizzo, Stephan Livera, and John Vallis have all written articles on maximalism over the past few days, and I’m looking forward to reading them, but I want to get my own thoughts out there first. I have been listening to my regular rotation of podcasts and I’ve heard pretty much every Bitcoin podcaster give their two sats on Carter, maximalists and toxicity. I’d like to give a shoutout to Joey and Len from “The Canadian Bitcoiners Podcast” for discussing Carter’s recent spat with the maximalists in a way that I felt summed up the situation well. They get into it at the end of the episode.
When I first started my journey into Bitcoin, Elon Musk was in the middle of pumping dogecoin. I remember the mainstream media’s fascination with the whole thing. Musk even hosted “Saturday Night Live!” It all seemed playful to me and it made sense. Musk is this future-centric tech CEO, and I knew that Tesla had put some bitcoin on its balance sheet. Bitcoin, ethereum, dogecoin — it was all similar to me at the time, and Musk seemed to fit in perfectly. I remember listening to Bitcoin podcasts that were very critical of Musk, and it confused me. Any publicity is good publicity, isn’t it? A lot of the Bitcoiners I was following were really upset over what this guy was doing, and I just didn’t get it. I guess this was my first taste of Bitcoin’s “toxic” culture, not that I thought much about it. I wasn’t ready. I was too busy learning.
Strolight wrote his article around the same time that Musk was hosting “Saturday Night Live.” It was before I was ready to understand it all, so I’m thankful to have stumbled upon it now. It really motivated me to do a personal exploration into how I define “maximalism.”
I’m nowhere near done in this exploration and it might be something that I ponder for a long time. I’m still way too new here to have a fully formed opinion on what “toxic Bitcoin Maximalism” really is, but I know enough now to have a grasp on how Bitcoin continues to shape me and how important it is. Bitcoin means different things for everyone, so it only makes sense that Bitcoin Maximalism is just as personal. I truly believe that in Bitcoin we’ve discovered the greatest form of money ever and with this discovery, we have the potential to realign many (if not most) of the perverse incentives that plague this world. To me, this belief is Bitcoin Maximalism. Does standing up for that make someone a toxic Maximalist? I guess it depends on your perspective.
Generally speaking, Bitcoiners are leaders: type-A personalities that aren’t exactly the most politically correct group of people. What we are is a group of sovereign individuals guided by truth, transparency and a belief in a protocol that doesn’t have time for bullshit. Of course, we can come off as toxic! Does that really surprise anyone!? There is a difference between being toxic and being an asshole, though. Some of the things I’ve read on Twitter coming from defenders of Bitcoin are flat out rude, intolerant and childish. Slinging insults in the name of Bitcoin doesn’t make you a maximalist, and it doesn’t make you a hero, either. Stop that shit. It isn’t helping. But if you’re calling a spade a spade, that isn’t toxic. And if you’re offended by someone being toxic by defending something they believe in, maybe you’re the toxic one.
Bitcoin is for everyone. And while there are no gatekeepers, maybe there’s a need for protectors. Maximalism is that protection. Bitcoin Maximalists have to fight off threats, and there certainly are a lot of threats out there. Maybe maximalists need to be toxic since Bitcoin is itself, perfectly pure. Maybe Gigi is right and toxicity equals love. It's been said many times before, but I believe that the toxic maximalists serve as Bitcoin’s immune system. Like a biological organism, sometimes the immune system can go too far and kill off healthy cells from time to time, but it does so to protect the organism. A degree of toxicity is needed because if we’re not toxic enough, then shitcoins, scammers and fiat bloodsuckers will run rampant. But if we’re too toxic, we’ll waste our energy fighting among ourselves and we’ll alienate people who are looking on with curiosity. While no degree of toxicity will ever kill Bitcoin, an overly toxic environment could certainly slow down its adoption. It’s a fine line to walk, and every Bitcoiner needs to find where they fit in, but we don’t need to all agree on where that line truly is.
I know that Nic Carter has studied Bitcoin in more depth and for longer than I have. He knows that bitcoin isn’t just an investment tool or an asset class. He knows just how important the discovery was. That being said, he should be allowed to invest in as many “blockchain” companies as he chooses to, but he’s going to be held to a higher standard than some newbie, and he should expect that. He shouldn’t be surprised (or triggered) when people call him out on it. Is this a case of the immune system attacking a healthy cell? I’m not sure.
Personally, I find myself getting more and more convinced about Bitcoin by the day. I suppose my maximalism is growing and I find myself being less and less tolerant, but you still won’t find me hurling insults on Twitter. That’s not who I am, but I reserve the right to be as toxic as I need to be. And you know what? You don’t have to like it. We all have a role to play in this Bitcoin world. If I can eventually become the “not-so-toxic” Bitcoin Maximalist, that’s a role I’d be honored to serve, but to all the toxic maximalists out there, keep up the good work. Growth only comes from discomfort, and every time your toxicity makes someone uncomfortable, it helps someone else along their journey. Keep calling out bullshit as you see it.
The Fed will 'abandon' tightening, causing gold to soar higher – Rich Checkan
Gold's performance has been tumultuous this year, with the war in Ukraine sending the metal above $2,000 per ounce. Recently, however, gold has fallen in price, and is down year-to-date by 7.8 percent.
Spot gold is currently trading at $1,725.
Speaking with Michelle Makori, Editor-in-Chief and Lead Anchor at Kitco News, Rich Checkan, President and Co-Founder at Assets Strategies International, said, "people want to know why gold isn't doing its job. I submit it is… it's falling in value, but at a much slower rate than other asset classes."
The S&P 500 is down 16.6 percent year-to-date, and Bitcoin is down by 51 percent over the same period.
Checkan said that what the Federal Reserve does next could send gold soaring to $2,400 per ounce within the next 12 months.
He spoke with Makori at the FreedomFest 2022 conference in Las Vegas.
A Fed pivot?
The Federal Reserve has raised its key interest rate by more than 100 bps since February to combat inflation. The June 2022 inflation figure is 9.1 percent, the highest since 1981.
Checkan said that the Fed will reverse course on its tightening once the economy starts to crumble. He added that "we've got one or two more rate hikes [left] in the U.S.," before the Fed reduces rates.
The record inflation of 2022 has been compared to the late 1970s and early 1980s' high inflation. During the latter period, Chairman of the Fed Paul Volcker raised rates to a peak of 20 percent, which historians say brought inflation down from almost 14 percent to less than 2 percent.
Today's Fed Chairman, Jerome Powell, has been compared to Volcker, but Checkan said that Powell lacks Volcker's "fortitude."
"I don't think that [Powell] is willing to risk a horrible recession," said Checkan. "The bottom line is inflation is so much further away, at this point, from interest rates than what Volcker started dealing with. I think [Powell] waited too long."
Jim Rogers: A 'positive development' in Ukraine 'in the next few weeks' could cause a big rally, before a huge crash in stocks
Gold's price
As the Fed reverses course and reduces rates, Checkan said that gold's price will soar higher.
He suggested that inflation would remain permanently higher, and since gold is an inflation hedge, this would cause gold to reach $2,400 within 12 months.
In the ensuing bull market, he said that $3,500 could be a peak for gold, before the price returns to a new support level.
"I think, realistically, we're looking at about $3,500 as the peak for gold before we pull back and then start the cycle again," said Checkan.
To find out Checkan's long-term forecast for gold's price, and his further thoughts on monetary policy, watch the above video.
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Will gold survive another 75 basis point hike
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"As long as there are concerns about the euro, there is room for gold and the U.S. dollar to both trend higher," he said.
Jim Rogers: A 'positive development' in Ukraine 'in the next few weeks' could cause a big rally, before a huge crash in stocks