Remonetization of the Pet Rock, and a Gold Chart Update

When gold was trading at $1,130 per ounce in July of 2015, an infamous blog post over at the WSJ appeared that equated gold to a pet rock.  Gold fell an additional $80 over the following five months, but Yellen came to the rescue a mere five months later in December 2015 and launched the Fed’s first .25% interest rate piker since the great financial crisis.  Gold has risen with higher lows and highs ever since.  However, one jab at gold was not enough for the author, because he did it again…

Gold: It’s Still a Pet Rock – Jason Zweig at WSJ, July 2016

In retrospect, both were full of assumptions and exhibited an incredible paucity of analysis, and both now fall into the dark corners of a new meme, namely fake news.  The pet rock meme will die a horrible death, along with the Keynesian dreams that multiplied paper and digital bytes can replace gold as money.  It’s not going to happen, no matter how one tries to slice and dice an argument to fit it into their particular palette of the day in our lifetimes…

In the meantime, an interesting monetary debate is brewing in the minds of Keynesian monetary policy wonks and the Austrian school of economic thought.  With the successful launch of the Chinese oil bourse on March 26, 2018 where oil contracts are now denominated in yuan instead of the USD and are gold-convertible, China single-handedly fired a major shot across the bow of the petrodollar reserve currency hegemony.  China is also preparing to pay for all of its imported oil with yuan.

China oil futures launch may threaten primacy of U.S. dollar: UBSReuters, Mar. 26

Exclusive: China taking first steps to pay for oil in Yuan this year – sourcesReuters, Mar. 29


Read the full article with charts and technical analysis of Gold and the USD by TraderStef at CrushTheStreet – originally published on Apr. 8, 2018.