In September of 2016 we predicted Trump would best Clinton in what was the most historic Presidential Election in a generation. Even more, before Trump pulled off the upset we made gold predictions that are now coming to fruition.
In a May 15th, 2016 newsletter titled Why Gold Will Surge with President Trump we quoted the future President:
“This is the United States government. First of all, you never have to default because you print the money. I hate to tell you okay, so there is never a default.”
– 2016 Republican Presidential Candidate, Donald J. Trump
We continued,
“In that same interview with CNN’s Chris Cuomo, Trump boasted, “I am the king of debt.” After a statement like that, it is only fitting he would become the President of the most indebted nation in the history of the world.”
The Inflation President | Trump Makes Gold Predictions Reality
On November 13th, 2016, one week after Trump’s historic win we knew it would mark the end of U.S. Dollar hegemony. We immediately dubbed Trump The Inflation President, touting inflation and higher gold prices following his victory. Consequently, we boldly predicted the markets would rally:
“If Trump can achieve two-thirds of his economic goals, which would be good for any President’s standards, the markets could soar over the next few years. And although lofty, everyone who doubted Trump in the past few years has been proven wrong time and again.”
Nearly a year ago, on February 5th, 2017, we published Trump: Making Gold Great Again. We wrote that,
“Trump and his economic advisers have been on the warpath to reverse the rising value of the U.S. dollar, which hit a 14-year high in January.”
We concluded the detailed report with the warning that,
“He is starting by talking down the dollar, which has and will continue to be bullish for gold and commodities.”
On January 22nd, 2017, in Trump Set to Devalue U.S. Dollar, we sounded the alarm bells again, warning investors,
“Remember, the crux of gold’s existence has been the strength of the U.S. dollar. Before Tuesday’s decline, the dollar had risen roughly 25% since mid-2014.”
Furthermore,
“We knew either Trump or someone in his growing circle of advisors and appointees would attempt to put an end to this unsustainable dollar rally.”
Gold Soars as U.S. Dollar Break Down
While it has taken some time, gold is breaking out and the U.S. dollar is breaking down to multi-year lows. So, instead of the U.S. Dollar trading at a 14-year high, as it was in late-2016, 2017 saw its worst performance in 14 years. This is the Trump Effect, and it is not going away.
Treasury Secretary Mnuchin Crushes the Dollar in Davos
Trump’s Treasury Secretary Steven Mnuchin “laid out the benefits of a weaker dollar for the American economy at Davos on Wednesday,” according to reports from Bloomberg. His comments had an immediate impact on gold prices. Our gold predictions of late-2016 and early 2017 are now coming to fruition.
Shahab Jalinoos, global head of foreign-exchange trading strategy at Credit Suisse Group AG, joined a chorus of money managers, stating,
“As long as these kind of messages are presented it allows the market to imagine that’s what the administration wants to see. It validates the idea that further weakness is possible.”
Mnuchin’s two boldest statements include:
“Obviously a weaker dollar is good for us as it relates to trade and opportunities,”
Moreover, the currency’s short-term value is “not a concern of ours at all.”
To add the words “at all” is very telling and unneccesary. It sends a strong message that the Trump Administration wants to see a significantly lower U.S. Dollar. His wish was granted Wednesday as the index collapsed nearly 1% to 89.25. The dollar is now at its lowest level in 3 years. Technically the Dollar looks very bearish, having crashed below all support around the 90 handle.
U.S. Dollar Index – 1 Month Chart
Looking at the 1-Year chart of the index and one can see the collapse in the summer of 2017 and now into winter 2018.
U.S. Dollar Index – 1 Year Chart
In January 21st’s newsletter, Hecla Tried to Buy this Junior, our report concluded that,
“We believe the precious metals complex is ready for a breakout.”
Gold Predictions Come True Under Trump
Gold soared as much as $25 Wednesday, finishing the day at $1,358.63 – up 1.72%. Silver did even better, closing up 4.32% to $17.58 an ounce.
Certainly, Trump has made his motives clear. His Administration will do whatever it takes to talk down the U.S. Dollar in a bid to boost America’s competitiveness around the world. Trump is gunning for manufacturing jobs and is playing a dangerous game of protectionism and currency devaluation. In 2017 we warned that the Global Currency War which began in 2010 was not over. Finally, the latest happenings are a continuation of a trend we saw coming as early as 2016, days after Trump won the most historic election of our lives.
