“This Is The Perfect Environment For Gold To Take Center-Stage”

Tuesday, June 2, 2020
By Paul Martin

from Grant’s Interest Rate Observer (via Sprott.com),
Tue, 06/02/2020

The price of gold peaked at $1,900 an ounce in September 2011. Nine years and many radical monetary-policy experiments later, it trades at $1,702. That it ought to move higher, and will move higher, is the theme of this analysis.

If we’re repeating ourselves, it’s in the noble cause of protecting the wealth of the readers of Grant’s. The sheer brute force of pandemic public policy is tilting the balance of financial risk. History can’t exactly predict the outcome of the Federal Reserve’s unprecedented jag of money creation (never mind the humane reasons why those dollars were set afloat). But as to the perishability of paper money, the record is unarguable.

“[T]he French people,” pronounced the Bank for International Settlements in 1949, four years after the end of World War II, “remembering the old gold franc introduced by Napoleon in 1803 (the so-called franc germinal), which maintained its value intact up to 1914, and thus withstood the strain of two lost wars—1814 and 1871—as well as a number of other vicissitudes, cannot help thinking that, compared with the paper franc which since 1914 has lost 99% of its purchasing power, gold, irrespective of any short-term fluctuations in the price paid for it, is in the long run a trustworthy basis for savings.”

The Rest…HERE

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