Inflation

The close link between gold and the dollar is well known: when the greenback rises, the yellow metal falls. For several years now, however, the international context has been shaking things up.

As lawmakers around the world congratulate themselves on taming this year, the charts of Oil, Copper and Gold suggest the biggest inflation is ahead of us.

Against an already tense liquidity backdrop, a new banking stress story emerged this week. The threat of a credit event is likely to support the gold physical demand in the short term.

The financial system should have been allowed to collapse 15 years ago when the problem was 1/3 of today. But governments and central bankers prefer to postpone the inevitable and thus passing the batten to their successors thereby exacerbating the problem.

The global economy is currently going through a long period of transition. This situation could prove favourable for gold, but unfavourable for equities, which are also suffering from high valuations and have never been so unattractive compared to US government bonds.

Bitcoin is often presented as "digital gold", but the question immediately arises: competition or complementarity? Gold benefits from a centuries-old history and unrivalled trust, while crypto-currencies bring the innovation of blockchain, and it is here that synergies can occur.

In the United States, public finances continue to deteriorate. Faced with a weak currency, Japan's central bank is forced to let rates rise. The price of gold in yen broke an all-time record, amid complete media indifference.

Since the resolution of the recent debt ceiling "crisis", the US national debt has soared by $1.8 trillion. A situation that raises concerns about its long-term sustainability.

The price of gold has rallied in recent days. Not only is the battle against inflation far from won, but the risk of a monetary policy error is also increasing.

One major phenomenon is often overlooked: the role of debt in the birth of the Revolution of 1789 and the bloody decade that followed. This period marked the end of a long economic cycle. Today's world has many similarities with the French situation at the end of the 18th century.