After the gold price closed below $1300 per troy ounce earlier last week, the gold price broke through the $1300/ounce barrier on Friday. The reason was clear: after peace between North and South Korea seemed a matter of time, peace negotiations went sour yet again. After weeks of peace talks between north and south, which should have resulted in a meeting between Kim Jong-Un and Donald Trump on June 12^th in Singapore, Trump decided to cancel the Singapore summit due to “open hostility”

How big is the chance that China will use its own currency – the yuan – as a countermeasure in the trade war with the US? In my view, the chance that China will do so is negligible. Another possibility to hit back and harm the US is by stopping to buy and/or selling US Treasuries. This could potentially wreak havoc on US interest rates, driving them much higher. What are the odds that Beijing will use this weapon of financial destruction?

While the dollar was struggling overall in 2017, non-dollar countries took full advantage of last year´s dollar weakness. According to the Bank of International Settlements (BIS), the total amount of credit to foreign (nonbank) borrowers increased dramatically as a result of the weaker dollar. By the way, feel free to interpret “nonbank borrowers” as emerging market economies. In the second half of 2017, a staggering 22% was issued in dollar-denominated debt. Issuing dollar-denominated debt is all well, as long as the dollar depreciates or, at least, does not appreciate.

Argentina is perhaps the best illustration of how issuing dollar-denominated debt can go terribly wrong. In June last year, the Argentinian government sold $2.75 billion dollars of 100-year dollar-denominated