We were saying a week ago that, after falling a little more, the price of gold should start to rise. This is what he has done in the last five sessions: first go down and then go up. The balance of these movements has been a rise of 2.20%. It is early to be sure that this is already the beginning of the great rise (+70%) that we predicted for the next 24 months, abusing the comparison with the behavior of the price of gold between mid-2018 and mid-2020. But not a bad start.
Gold is falling far short of the concerns of most investors in times like these, when cryptocurrencies rightly attract all the attention, thanks to their astronomical revaluations: when profits are important, everyone they want to join the party, and any appeal to common sense is considered typical of people who abhor “progress”, which, in this case, is also understood to be technological as well as economic progress.
The “fans” of cryptocurrencies use the possibilities of frightening the contrary that the language gives by derogatorily calling legal tender currencies (such as the dollar, the pound sterling, the euro or the yen) what they are: “fiat money”. That is, “money created out of nothing” (in the same way that the Most High said “let there be light”, and the light was made): make five billion dollars (and as many euros) and the dollars and euros began to flow. But what they fail to realize is that in the period when the equivalent of $10 trillion was created out of thin air, between 8,000 and 14,000 (sources differ!) different cryptocurrencies were also created out of thin air worth the equivalent of three trillion dollars, (added, of course, the initial value of those cryptocurrencies and the subsequent revaluation).
In other words, cryptocurrencies are, as a whole, just as “fiat money” as legal tender currencies. It is actually much more “fiat money” than these. Firstly, because any mortal with sufficient knowledge can issue them (one has even been issued in honor of the Head of the Opposition, Isabel Díaz Ayuso, the “Ayusocoin”!) and secondly because, although central banks, since 1971 , they no longer take much into account the volume of their gold and currency reserves when calculating how much money created out of nothing they can issue, finally they do have something in their assets with which to support the issuance of currency. Instead, behind the many cryptocurrencies there is only the implied revaluation of an indefinite value.
But it is clear that, in the financial world, as in the world in general, you cannot fight the elements: the “crypto” frenzy that neither central banks nor stock market commissions are taking care to contain will probably continue to increase, not until they are a danger to the international financial system, but until they have brought it down. If someone needs to visualize this, it is very easy to do so: the threat posed to the system by financial products that, later (after all, and with the damage done) would be called “toxic” (CDS, CDOs, etc.) were very evident in 2005. However, the party continued until in 2007 the whole building began to collapse and in 2008 it collapsed completely and emergency measures had to be applied that, now, it is almost impossible to stop applying.
Things are always like this: it seems that cryptocurrencies are already subject to the same fatalistic law that was at work in the crises (financial or not) of the past and will continue to be successful until it is too much. too late to contain the damage to the stability of the global financial system.
There is already an alarming symptom of how far the matter is going: a very expensive television commercial in which a well-known actor joins the phenomenon, assuring that the world is for the bold. Announcement that, by the way, 95% of viewers will not understand what it is about.
Gold also has such dangers, but the fanatic supporters of gold (such as those who say it will go from the current $1,820 an ounce to $10,000) at least put a cap on the appreciation, while for the fans of cryptocurrencies the limit of the increases is outer space, and from there to the border of the expansion of the universe that, as it seems, would be at the same point where we are (in the same way that the navigator Juan Sebastián Elcano ended at the starting point: Einstein already said that someone with good enough eyesight, and looking into space, would end up seeing his own tailbone…).
The rest of the assets continue their course as expected, except for the stock markets that exceed the already strong rise forecast here for this year 2021. Gas, for example, is currently respecting our “improbable” forecast and a month later it still has not exceeded the maximum price reached on October 5 (6.6 dollars per British thermal unit; you need to go up 18% to get over it).
There is a strong call for attention to the progress of the world economy by the Baltic Dry Index (which measures the cost of transporting solid raw materials by sea, such as coal, iron ore, steel or cereals) and that, in the same period of a month for which the price of natural gas has been contained, accumulates a drop of 52%, which is practically the largest in its 36-year history in a single month or quarter, if the 2008, which coincided with the financial crisis.
Does this mean something? Yes. That the prices of coal (-50%), iron ore (-61%) and steel bar for construction (-60%), aluminum (-20%), of all industrial metals , -11% (in addition to some agricultural raw materials such as corn, -30%, or soybeans, -32%) have also had sharp declines since their maximum prices in spring or summer. Whether, in turn, all this is a serious symptom of a slowdown in the global economy remains to be seen: in all recessions the Baltic Index falls, but there are significant declines that occur without a recession. Still, you have to be vigilant.
The enemies (internal and external) of Isabel Díaz Ayuso must be on the alert and, for now (and, if in doubt, ask at Pedro Sánchez’s house) are also subject to a curse (like cryptocurrencies): that whoever attacks her strengthens it. And that someone who has spontaneously given a name to a cryptocurrency (and also to a beer or some bar skewers) is clearly someone “hard to peel”.
In March we made the prophecy here that on May 4 he would win the elections and the dollar would strengthen to $1.15 per euro, which is where it is now. Is your fortune tied to the luck of the dollar? If so, it only remains to say that the forecast in this column remains that the dollar will appreciate. So, “rien ne va plus!”. Let’s see what happens this week with the price of the dollar, gold and natural gas, and let’s allow ourselves some political joke. After all, history is full of these coincidences.