Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Wisdom From Grandpa: Buy Gold

  by    0   2

The mainstream generally treats the gold standard as a bygone relic of a primitive past — something Grandpa might remember fondly along with 5 cent eggs and walking to school uphill both ways. But in this modern era of wild monetary policy and unprecedented money printing, even some in the mainstream are starting to think Grandpa may have been a little wiser than we thought.

A recent article in The Economic Times extolled the virtues of the gold standard and advises “make a strategic allocation to gold.”

It’s the counterweight to paper money which is continuing to lose credibility as a store of value.”

Chirag Mehta tells the story of the gold standard through the eyes of his 82-year-old grandfather who points out the absurdity of the Federal Reserve printing trillions of dollars.

They don’t really have the money, though, do they?” And so they are just going to print it, aren’t they? Out of nothing? Is there any real backing, like Gold in earlier days?”

“No,” Mehta answers.

But that’s not right, is it?”

Grandpa went on to insist that the Fed is “making a grave mistake” with its loose monetary policy and 24-7 dollar-printing, adding that “it is not going to work as it would not lead to real economic growth.”

This is exactly what Peter Schiff said in a recent podcast. Printing dollars and pumping money into the economy is nothing more than pumping in inflation. It’s not like the government is putting real products into the economy. It’s not creating wealth. It’s not adding resources. It’s not creating anything of value.

Well, if you just increase the supply of money, it doesn’t do anything to change the supply of goods and services. So now, when you divvy those goods and services up, you just have to assign a higher price to all of those goods and services so that the market clears. But nothing of real value is actually added.”

Grandpa goes on to explain the gold standard – that money used to be backed by physical metal. That put some restraint on the amount of currency the government could issue. Fractional reserve banking tore down some of those restraints, but today we have a pure fiat system. Currency has no intrinsic value. It’s really just a confidence game.

If too much money is created the public will lose confidence in its purchasing power and the perceived value of the money can collapse. Remember, fiat money has no intrinsic value; it only has perceived value. This is why most of the fiat currencies met with disaster if you look back in history.”

Today, the Federal Reserve is testing whether it can grow its “balance sheet tree” to the sky. This will lead to a devaluation of the dollar, grandpa says.

Our Government calls this ‘inflation,’ when in reality it’s devaluation. This devaluation will eventually lead to a loss of faith in the dollar and people will no more want to hold the fiat currency. As a result, people will want to convert their cash/wealth to something that they believe in, something that can protect their wealth with, something that has intrinsic value and that has proved its worth over decades.”

Gold.

This is a mainstream article, so don’t expect to find a call to a return to a gold standard. But for something published by The Economic Times, the conclusion is still pretty radical. Gold should be viewed as a “monetary asset,” not a commodity.

Given the current economic backdrop, where governments are struggling with problems like rising deficits and unsustainable debts, it is indeed logical for gold prices to increase in value. With policymakers continuously debasing currencies, gold will be viewed as ‘the real liquid store of value’ investment, lending some calm to the chaos.”

Gold will likely continue increasing in value because it is the only currency with a highly constrained supply.

When a central bank increases their money supply, the price of other currencies adjusts upwards. This is true for all currencies including gold. Therefore, the one thing against which global currencies are truly perishing is the ultimate form of real monetary asset i.e. Gold.”

Download SchiffGold's Gold vs GLD EFT's Guide Today

Get Peter Schiff’s key gold headlines in your inbox every week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

Related Posts

Silver Demand Expected to Exceed 1 Billion Ounces in 2021

Every key area of silver demand is forecast to rise in 2021, according to the Silver Institute’s Interim Silver Market Review. The institute projects silver demand will come in at 1.029 billion ounces this year. That would mark the first year demand has exceeded 1 billion ounces since 2015.

READ MORE →

Jerome Powell 2.0

President Joe Biden has tapped Jerome Powell to serve a second term as chairman of the Federal Reserve. Biden said Powell’s “steady leadership” helped calm markets as governments shut down the economy due to coronavirus, and he expressed confidence in Powell’s future leadership. “I believe Jay is the right person to see us through,” Biden […]

READ MORE →

The Fed Pulled Off a Masterful Manipulation of the Junk Bond Market

The Federal Reserve pulled off a magnificent manipulation of the junk bond market, facilitated a massive wealth transfer from savers to speculators, pocketed millions of dollars, and then washed its hands of the matter. In March 2020, as governments shut down the economy for coronavirus, the Fed slashed interest rates and launched a massive quantitative […]

READ MORE →

Poland Plans to Add Another 100 Tons of Gold to Its Reserves

During a recent interview, Bank of Poland President Adam Glapiński said the central bank plans to add 100 tons of gold to its reserves in 2022. In 2018, the National Bank of Poland began aggressively adding gold to its reserves. Through the first half of 2019, the Polish central bank added more than 100 tons of […]

READ MORE →

The Fed’s Artificially Low Interest Rates Are Eating Away at Social Security

The Federal Reserve has held interest rates artificially low for decades. This causes all kinds of distortions and misallocations in the economy. And it’s creating quite a problem for the Social Security Administration.

READ MORE →

Comments are closed.

Call Now