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Tuesday, October 10, 2017

Trump's War Position Poses as Big Reason to Own Gold

Unlike his predecessors, Trump shows lack of hesitation in waging war against North Korea.

As far as MarketWatch contributor Howard Gold is concerned, Donald Trump is the biggest friend gold bugs have had since President Nixon decided to abolish the gold standard in 1971. In a recent article, he writes that the reason for this lies in Trump's lack of hesitation to wage war, even nuclear war, against North Korea, as opposed to focusing on diplomatic solutions.

Trump's recent statement towards Secretary of State Rex Tillerson, in which the President said the latter is wasting his time trying to negotiate with the Asian nation, serves as the perfect example of his battle-ready stance says Gold.

He compares Trump's feud with North Korea's leader Kim Jong-un to the President's goading of rival candidates during the 2016 presidential race. However, the implications are far greater: not only does Kim command a nuclear arsenal that many think poses a serious threat to the U.S., but some also fear that the totalitarian leader might be dangerously unstable.

Gold notes that Trump's predecessors showed a willingness to negotiate with North Korea, aware of the danger that the country could pose if provoked. Trump, however, seems ready and willing to engage in war.

The article also states that the way the current President is handling Iran – another country with a developing nuclear arsenal – also raises concerns. According to Trump, the Iran nuclear agreement, which was designed to keep the Islamic Republic's nuclear weapons under control, is "one of the worst and most one-sided" deals ever – he went as far as to say he'd declare Iran out of compliance with the agreement, despite his own administration confirming the opposite.

Trump's back-and-forth with North Korea's foreign minister, with neither party showing a willingness to back down from the notion of war, only added fuel to a fire that could engulf several nations and plunge them into conflict on an unseen scale.

According to Howard, there is currently no better argument to own gold than Trump's stance. He warns that the risk of war is far greater than either Wall Street or Trump's supporters would like to admit, placing the chance of conflict on the Korean peninsula between 25%-50% and the likelihood of nuclear war in Asia between 10%-20%. He suggests, with odds like these, allocating at least 5% of one's portfolio to physical gold is the safest decision one can make. Bullion won't prevent a cataclysmic event from happening, but it's going to serve as insurance during a time when it's needed most.

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