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

Is It March All Over Again?

It looks like March all over again. Pretty much everything except dollars sold off yesterday. The Dow Jones was down 943 points. The S&P 500 dropped by 3.53%. The Nasdaq plummeted by 426 points.  It was panic selling as markets fretted about the rise in COVID-19 cases, new lockdowns in Europe, and the lack of […]

READ MORE →

Millions of Americans Struggling to Pay Their Bills

We read a lot about the big-picture impacts of the economic meltdown caused by the government response to the coronavirus pandemic. We hear about the millions thrown out of work, the surge in corporate bankruptcies and small businesses shutting down, and the specter of surging inflation. But how has all of this impacted the average […]

READ MORE →

Inflation Is Here

The mainstream isn’t worried about inflation. In fact, we’re told inflation is muted. And that’s true, at least by some measures. We haven’t seen the rising consumer price index (CPI) you might expect as central banks inject trillions of dollars created out of thin air into the economy. But just because government numbers don’t reflect […]

READ MORE →

The Stock Market Is Completely Untethered From Economic Reality

We’ve been saying for months that the stock market has completely disconnected from economic reality. The markets have hit record highs despite the economic chaos caused by the government response to COVID-19. As Peter Schiff put it in a podcast back in May, the markets are on a Fed-induced sugar high. In a recent article, […]

READ MORE →

Ranks of the Long-Term Unemployed Growing

The mainstream spin on unemployment is that things are improving. The unemployment rate is coming down. The number of weekly jobless claims recently fell below 800,000 for the first time since government lockdowns in response to the pandemic went into high gear last March. But there are some troubling signs that undercut this good-news narrative. […]

READ MORE →

Comments are closed.

Call Now