Gold stabilises ahead of United States tax reform proposal
The White house is marketing it’s new tax plan because it's the "biggest tax cut and largest tax reform" in United States history whether or not President Trump will get such a formidable set up through Congress remains to be seen. Republican deficit hawks are already raising questions. Gold has stabilised after falling in the wake of the French election outcome. The extra weight was provided by the U.S. tax reform proposal, which incorporates a new company tax rate. The stock market is loving the concept and places safe-haven assets on the defensive.
If you take the notion that the tax cuts equate to $120 billion in lost tax revenue, that may need to be found elsewhere unless the feds make massive cuts which are unlikely to pass through the forest of ingrained Unions, and typical senate blocking. The Trump administration claims the loss will be offset by growth, the priority is that that lost money ought to be borrowed, so, more borrowing = more inflation for savers.
As a property developer, leveraged to the hilt, the President might not be too worried adding to the already massive $20 trillion national debt, however people in the US will soon realise that they are actually borrowing the prosperity from future generations and stealing the savings of the older generation through inflation. Can US companies use their newfound tax savings to stimulate enough growth to offset all these huge debt issues? I personally doubt it, even though I love the idea of tax cuts, they really need to come with spending cuts, which don’t seem to be on the table. Like any politician, it’s just easier to print more debt based paper.
In other gold and bitcoin influencing news.
This week, the full U.S. Senate will be briefed by the Trump administration’s national security officers on matters regarding North Korea. The focus is probably going to be on the threat exposed by the DPRK's advancement in so-called nuclear weapons and delivery vehicles. I mean, I don’t believe a word that comes out of the white house regarding WMD’s after the blatant lies that the world was fed to lead us into Iraq.
According to New York Times, "North Korea’s arsenal may well hit 50 weapons by the end of Mr Trump’s term, about half the size of Pakistan’s. American officials say the North already knows how to shrink those weapons so they can fit atop one of its short- to medium-range missiles — putting South Korea, Japan, and the thousands of American troops deployed in those two nations, within range."
Whether these issues escalate to warrant a preventative strike remains to be seen. But I hear the pattern of Neo-Con War drums beating so mainstream truth will be the first casualty moving forward. Meanwhile, the bitcoin network keeps growing and gold has it’s 3000 years of storing value through war when pure paper economies are fickle and crumble.