When gold moved above its all-time record price last month, we pointed out that it’s easier to understand gold’s record-breaking move up if you look at it from the other side of the equation. The dollar is now at its all-time low compared to gold.
In simple terms, the dollar is losing value and dollar debasement is driving up the price of gold.
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.”
The Dow Jones is back of 25,000 and despite increasing tensions with China, people seem pretty optimistic about the economic future as states begin to open back up. SchiffGold Friday Gold Wrap host Mike Maharrey says people should know better. He makes his case by digging into some of the long-term ramifications of the economic shutdown and the government/central bank response to it. He also recaps the last month in the gold and silver markets.
A lot of people still seem to think the economy will fire right back up and things will snap right back to normal when the government-imposed coronavirus lockdowns end. I don’t believe we’re going back to normal for a number of reasons – primarily because things weren’t normal before coronavirus. The economy was a big, fat, ugly bubble. Coronavirus was a pin that popped the bubble.
But even if things were normal before the pandemic, the economy still wouldn’t just fire back up and restart on a dime.
Gold took a hit on Tuesday but held a key support level and rebounded as the week went on, even as stocks set new records. Why does gold continue to keep showing strength even with all the headwinds? Is it just coronavirus? Or is something else going on? Host Mike Maharrey talks about it in this week’s Friday Gold Wrap podcast.
The Fed has indicated that it won’t hesitate to let the inflation Jeanie out of the bottle. As Peter Schiff put it in a recent podcast, the central bank is willing to resurrect the inflation monster that former Fed Chairman Paul Volcker slew.
Even if the Federal Reserve wasn’t set to allow inflation to run hot, it targets 2% inflation as a matter of policy. In simple terms, the central bank intentionally devalues your money by 2% every single year.
As economist Thorsten Polleit explains in an article originally published at the Mises Wire, inflation has pernicious effects on the average person, while tremendously benefiting the chosen few. Polleit calls inflation an “inflation scam.”
While investors often treat gold as a commodity, at its core, gold is money. Silver also has a long history as a monetary metal. But what about other rare metals? Could they serve as money as well?
In the following guest column, SchiffGold client Antony Pouros makes the case for platinum.
Gold is money. Gold has been money for thousands of years. And one of the reasons gold is money is because it’s immutable.