Gold is soaring—now at the unbelievable price of $3,200.

The Dollar is crashing because foreign trading firms are being liquidated.

Let me explain.

Foreign traders, whether Japanese, European, Chinese, whatever borrow money in their own currency to exchange for dollars to then buy USD denominated securities. When the markets pull back and their foreign loans are called in they have to sell assets and get back to their home currencies quickly.

This creates massive selling of dollars (and treasuries in order to get dollars), buy back their home currencies then pay back their loans.

It has nothing to do with trade wars or anything of that nonsense. It has to do with the fact that the margin call man has come and he wants his Yen,Pounds, Euros, Yuan etc.

The key currency to watch is the Yen, as Japan is the biggest capital allocator in the world. It keeps getting stronger—meaning liquidations are ongoing. They carry trade is unwinding big time this time.

What is amazing to me is that gold is on a rocket ship in the midst of these liquidations. It means that the trading houses and hedge funds had no gold to liquidate! It’s all somewhere else, like the central banks, and they are not going to be selling anytime soon. So as the USD goes down relative to other currencies gold goes up in USD.

How far gold goes is the big question. The other question is why you don’t have any?

Good luck