by Nick Giambruno,International Man:
No matter what happens, I am confident the Iran war will be a major tailwind for gold.
Here is an overview of how I see the conflict unfolding and its major financial implications.
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“When the world’s dominant power that has the world’s reserve currency is overextended financially, and it reveals its weakness by losing both military and financial control, watch out for allies and creditors losing confidence, the loss of its reserve currency status, the selling of its debt assets, and the weakening of its currency, especially relative to gold.”— Ray Dalio
While the US dollar is currently the leading global currency, it was already on a path of inevitable debasement and eventual collapse—even before considering the compounding effects of the Iran war.
The only reason the US government has managed to avoid severe consequences from its inflationary monetary policies is the US dollar’s status as the world’s top reserve currency, thanks to Washington’s military and economic dominance that has prevailed since the end of World War 2. However, as this dominance wanes, so will the dollar’s purchasing power.
The US government’s ability to hide the effects of its rampant money printing by offloading trillions of dollars to foreigners is nearing its end.
That’s terrible news for the US dollar.
As the world digests the Iran war and its consequences, I expect we’ll see a multipolar world order emerge and the US dollar lose its privileged position as the world’s premier reserve asset.
Source: SGT Report
