In the wake of Donald Trump’s failure to make any sense at his very first foreign policy speech, on the subject of defending American interests, gold and Swiss Franc have taken center stage. People are nervous about what the world economy will look like after Trump’s speech. But that doesn’t mean they’re less worried about Trump’s executive order banning travelers from several countries.
Gold has soared to great heights and the Swiss Franc has retreated just a little bit. The presidential election is in the rear view mirror, and now people have decided that the important issues aren’t economic or foreign policy. It’s about politics, so they’re sticking with gold and Swiss Franc as their choice for investing.
Here’s why. The American government now has the opportunity to announce that it will increase trade deficits. That would be a disaster for the Swiss, who are dependent on US tourists.
It would be a disaster for the Swiss, who are dependent on US taxpayers for health care. It would be a disaster for the Chinese, who are in the midst of a huge currency war with the US. And it would be a disaster for the Swiss, who have been forced to resort to printing money to finance their trade deficit.
So, Americans should go into panic mode and get gold and Swiss Franc now before the political crisis worsens. Because, they’re certainly not going to save the Swiss Franc from the Trump Administration. They are going to lose the Swiss Franc. That’s how desperate the Swiss are right now.
You should never make money by going long a financial asset in a situation like this, because you may be wiped out. By the time you get out of it, gold and Swiss Franc will be priced way too high and you will be way behind.
China and the United States will be competing in a currency war. Trump may be able to declare that he is a friend of Taiwan, but he’s still not going to be able to protect Taiwan’s defense budget.
China is trying to position its military in a position to meet the US in a nuclear arms race. And the United States might be unable to keep that economic war going. It could be an economic disaster for the US.
It’s a scary scenario, and the fact that no one in the Trump Administration seems to understand the implications is frightening. Maybe they don’t want to learn, or maybe they just don’t care. Either way, if Trump does send the Taiwanese missiles, we will see the gold and Swiss Franc soaring.
Why? Well, because gold and Swiss Franc are good places to put your money while they’re falling.
It’s too bad that Dutch bund is the kind of war chest that Trump used to build his empire. Of course, it wasn’t an empire.
This pre-election rally in the Swiss and the gold has implications beyond political events. This is a subtle manipulation of market prices. People can forget about price charts and stop their studies of the Chinese and Swiss franc and invest in precious metals.