We have been accustomed to using paper money as a ruler in our daily life, for example, when we go to the shopping mall or vegetable market to ask the price, we will always ask how much is the mobile phone, how much is the beef, how much is the cabbage, and so on, all of which are used as the ruler.
Is there a ruler for banknotes? Of course there are.
For example, the dollar against the ruble** means that the ruble is worth **, and the Swiss franc against the US dollar** means that the value of the Swiss franc is rising, and these banknotes are using the dollar as a yardstick.
It is obviously problematic to use the dollar as a ruler, for example, the United States publishes inflation data every year, and some years are relatively high, theoretically speaking, this number is the depreciation of the dollar in the current year, and the depreciation of the dollar as a ruler does not reflect the rise in the value of a paper currency or the extent of **, indicating that the dollar is imperfect, or a trick.
For this reason, the enemy of the Federal Reserve is not paper money, but **, which is synonymous with constancy and the most fair ruler recognized by people for thousands of years, that is, **nature is money, so the only enemy of the Fed is**, and it is conceivable that the Fed uses various tricks to suppress **.
But no matter how it is suppressed, ** will always shine its light.
In the seventies of the last century, **out of the vigorous bull market, **out of the big bull market means that the value of the dollar is accelerating**, as a result, the global commodity market and the real estate market in the United States as the representative of the real currency market have come out of the big bull market.
The internal logic of this is easy to understand, **and commodities are physical money, the more scarce commodities their monetary attributes are stronger, when the price of gold is bullish, it means that the value of the dollar is accelerating**, and all physical currencies **will**. The physical currency has not changed in this process, a ton of copper is still a ton of copper, a house is still a house, and the relationship between supply and demand does not change much during the period of stagflation, only the value of the dollar has changed.
In the last 20 years of the 20th century, the international gold price entered a bear market, which means that the value of the US dollar is very stable, and the commodity market has also seen a long bear market.
From the end of the last century, the international gold price began to run a bull market again, until the end of 2011 ended this round of rally, which means that the value of the dollar with ** as the standard has once again entered the cycle of acceleration**, and as a result, the commodity market has once again come out of the bull market.
This shows that although in the short term, the commodity market will be affected by the relationship between supply and demand, but this impact is limited, due to the oversupply of commodities will lead to a reduction in related investment activities, and eventually suppress the supply, which will eliminate the suppression of oversupply on the first demand, the same is true when the supply exceeds demand, when the shortage of supply leads to the rapid increase in investment activities, it will amplify the supply, and eventually it will be flattened, for those industries with a short investment cycle, this inhibition effect is more obviousTherefore, the relationship between supply and demand is useful and indispensable for judging short-term fluctuations, but it does not play a big role in judging the trend, and the core element that determines the trend is the fluctuation cycle of the dollar value.
Since the end of 2011, the international gold price has entered the first cycle, and the commodity market has begun to enter the downturn. It's long over.
Since June 2018, the international gold price has once again walked out of an obvious upward breakthrough trend, but this round of ** did not come to an abrupt end until August 2020, just after breaking through the 2011 high, and then fell into consolidation. In this cycle, the commodity market is only showing a recovery trend, although the core of mainstream varieties such as oil and copper has improved, but it has not broken through history.
Highs, but now that the dollar has seen another round of rapid depreciation, it will be reflected in the commodity market, where coal, natural gas and some minor metals** have hit record highs.
Now, it is likely that the time has come for the commodity bull market to officially start!
In August 2020, after hitting a new high of $2,089 per ounce in New York, the gold price began to consolidate, breaking through the 20-month ** in July 2022, returning to above the 20-month ** in December 2022, hitting the second highest of $2,085 in May 2023, and then stepping back on the 20-month **, after which it broke through $2,089 in December 2023 to hit an all-time high of $2,152.
Judging from the weekly trend after December 2023, the week of February 16 showed a trend of stepping back for 20 weeks, and then rebounding, indicating that the support of 20 weeks is effective. When the 20-month** and 20-week** form effective support, it technically indicates that the uptrend is established.
Fundamentally, the war years have arrived, and in order to cope with war and the arms race, we can only rigidly expand military spending; After economic globalization, the debt ratio of the world's major economies, including the United States, has risen to an extremely dangerous situation, and the cost of debt has risen sharply after the rise in interest rates; The arrival of the war years brought the end of globalization, and the global industrial chain began to be reorganized according to the requirements of ideology and national security, which would lead to a sharp decline in the efficiency of the global economy, and many other factors will affect the value of paper money. In a technical term that people are familiar with today, it is the inability to use positive real interest rates in such cycles, that is, the long-term average of the central bank's nominal interest rate minus the inflation rate cannot be positive, which is the fundamental driving force for gold prices.
Driven by both fundamentals and technicals, gold prices have only one way to go up, and the current upward breakthrough trend marks the beginning of a new acceleration cycle based on the value of the dollar.
When the value of the US dollar began a new cycle of acceleration**, the global physical currency market, including the urban real estate and commodity markets with good supply-demand relations, began to start another round of vigorous bull market.
In the past, many people said that when the dollar interest rate is high, there will be no bull market in the physical currency market.
The real bull market is always formed in a state of high interest rates, which stems from high interest rates, indicating high inflation, indicating that the purchasing power of unit banknotes is depreciating at an accelerated rate, and the purchasing power of paper money depreciates faster when the real interest rate can only be negative in the long run.
The seventies of the last century was a period of ultra-high interest rates in the United States, and a rare bull market in physical currency was formed!
The bull market that began at the end of the last century was more complex and driven by both China and the United States. After the bursting of the Internet bubble in 2000, the U.S. economy lost its growth point, and the U.S. industrial capital began to accelerate the outward migration, which shows that the U.S. economic efficiency is declining, and the decline in economic efficiency indicates that the value of the dollar has entered an accelerated cycle; Since the end of the last century, China's demand has become the center of gravity of the global economy, and the RMB is in a state of high interest rates, which is the core force driving this round of bull market.
Now that Eurasia has entered the years of arms race and war, it is a period of capital and industrial chains to North America, and the current Fed benchmark interest rate is 525% is already significantly higher than the 2019 high in the last rate hike cycle5%, indicating that the Fed has entered a new cycle of high interest rates, which has fired the starting gun of the real money bull market.
Only with the explosive package of high interest rates can we get out of the real bull market!
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