Something big may be coming

If I’m telling you that gold is reaching all time highs, would you believe me?

‘You must be nuts”, I’m hearing now. But don’t be so fast to judge. See the below chart to see if I’m correct!

Gold has clearly surpassed its old highs and has broken the resistance into all time highs, right? Of course, not in the dollar term but also not in a Zombie currency. It is one of the major currencies from one of the richest countries, Swedish Krona (the blue line for SEK)! So why it is important that makes me think something big for gold may be coming?

Among many reasons for the all time highs for gold in SEK, one major factor is its negative interest rate that has been in place for about 10 years now. What does a negative interest mean? Well it means you have to pay the bank to save your money in the bank! Sounds crazy, right? But this is not uncommon actually in the Europe. Actually many rich countries including Switzerland have gone negative for quite few years and it will become more common moving forward. It is not a pretty world anymore, folks! The decades long senseless spending and borrowing virtually by all the governmentS has put us in a road of no way back. US is the only major country in the world right now with quite a strong economy ongoing but it will also face dire situation of unmanageable debt load in the years ahead. It is just a matter of time, not if, that the reckoning day will finally knock at our door!

So with persistent negative interest rates in Sweden, it has driven people away from saving and the only safer way to save is to buy gold in general. It is understandable why gold has broken out to all time highs in SEK but what’s the big deal in terms of the US dollar for gold, which is still struggling at the low end of this correction? Indeed, after 8 years of severe correction, it is still challenging for gold to break out to its next major resistance around $1400, not to mention the all time highs in $1900s. But I have a hunch that gold may be poised for a really big move to the upside this time. We may be even at a time similar to early 2000s when gold started a decade long gigantic bull run, jumping highs by 5 times! Three major factors for me to think about it this way:

• We now know that it is nearly certainty that FED may likely cut rates soon, which is a big positive for gold and the reason for a fantastic up run for gold in the past few day. Will we see a negative interest in the future in the US? Difficult to say but I cannot say no for sure, especially if the debt bubble is burst in a big way in the next few years!
• I have talked about this before that our major financial danger facing us is the uncontrollable debt bubble in all areas: governmental, corporate, and personal debt, all in the historically high levels and increasing. There is no way to pay back all these debts and if the long term interest rate, which is not controlled by FED, starts to move higher, just watch the cliff fall!
• Then the unstoppable socialism movement in the US. The basic principle for socialism is to use others money (via tax) or print unlimited money for the purpose of wealth redistribution, in the name of fairness. Every country in the world which has tried and implemented socialism has all gone bankrupted. Just think about what is happening to Venezuela in which the biggest humanity disaster due to socialism is still unfolding. Unfortunately, socialism is taking real momentum now in the US by the Left and more than half of the Millenniums who have been brainwashed with no idea how terrible the socialism will lead us to are in favor of socialism. Sonner or later with Millenniums becoming the majority of the population, socialism will become a reality unfortunately! This will of course lead us to another disaster on top of the debt crisis!

All of these will be a big boost for gold as it may become the only safety heaven for sensible people to hide. That’s why I have been a long term gold bug and have no doubt we will see all time highs for gold again. Right now it is more of a gut feeling than anything else that the next big bull run for gold is coming. I can be wrong of course as gold has been struggling for many years and each time failed to break out. Maybe this time it is the same. More importantly, even if gold indeed starts its next leg up, it wont’s be a straight line up but it can still be very volatile. So you really need belief and resolve to hold gold. Personally I do and will continue to do so!