Uncomfortable reminder

Gold continues to be a very misunderstood asset. It continues to be underowned among investors, both individual and institutional, even though the last ones think it’s overvalued and crowded, as you can see in the chart below. Who is buying gold and pushing prices higher? Central banks, particularly PBoC. They have been massive buyers trying to diversify away from Treasuries and the U.S. dollar. The guardians of the fiat currency system are buying its nemesis, while they try to back the debt and deficits their respective governments are fueling. The irony now is that the ECB is publicly stating, gold rise is becoming a problem for the stability of the system they (mis)manage. It competes with the CBDCs they desperately want to implement in case the new world order comes sooner than expected. Gold is the uncomfortable reminder that governments and central banks lack the fiscal discipline necessary to manage the current system, and every $100 in dollar price increase puts us closer to a new one, without knowing exactly who will take the reins and what shape will it have.

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