by Alasdair MacLeod
Gold Money
Monetary authorities and domestic users do not understand the true relationship between their fiat currency, the threats to its purchasing power, and the relationship with gold.
It’s now increasingly assumed that the US economy is not performing as well as the statistics suggest, and that the Fed must cut interest rates and keep on cutting. The assumption is based on a mixture of Keynesian hope and market experience of the last three or four decades, which cover the work-experience of today’s investment managers. Last week I quoted from an article by Ambrose Evans-Pritchard in The Daily Telegraph of 5 June, who wrote that “Citigroup says that the Fed will have to cut interest rates in July and at every meeting until mid-2025”. Therefore, a research report from one of the largest banks in the US is evidence of this view.
It must be admitted that in the short term, such a strong consensus over interest rates can become self-fulfilling.