The real price of gold!
Each new crisis is resolved through the creation of new debt and the financial well-being in the society is maintained with the help of newly printed money. How long will this economic model last? And to what level will the price of gold rise?
The current Coronavirus crisis has demonstrated some things that are now becoming the “new normal”. This led to the exacerbation of old problems in finance and economics. Now nothing works without a money printing press. What else is left for the political and financial authorities of the state to do?
Monetary and taxation policies merge into one. Social welfare is no longer created through pure economic activity. This development of events was predicted by the Club of Rome back in 1972. We are now at a turning point in the global monetary system. Politicians have long separated money growth from real economic growth. This began after the abolition of the Gold Standard in the United States in 1971. Since then, global debt has been growing non-stop.
Since 1970, the value of gold has grown by about 7% per year. In other words: it is not the price of gold that is growing, but paper currencies are losing their purchasing power in relation to the yellow precious metal.
In the coming years, nothing will change in this regard. It is necessary to introduce a new monetary system on new principles, since the world debt can no longer be serviced and printed money no longer has value. For example, each new euro stimulates the economy to a lesser extent. It turns out that printing money already loses its meaning.
How long will monetary policy last before compulsory growth and the debt welfare state ends? Most likely some more time. For many decades now we have seen salvation from each new crisis, by increasing the debt burden. The coming years will be marked by the fact that our social life will be transformed and social and legal norms will be revised.
Politicians will continue to change laws in order to preserve the current welfare and at the same time smooth out the negative aspects of the financial and economic structure. Economic interests will be more important than civil rights and freedoms, which are likely to be further restricted. The society will be split, leading to an imbalance that cannot last long. The beneficiaries from such an imbalance will ignore the destructive development as long as possible, until chaos sets in, which will break the System.
The purchasing power of gold has remained virtually unchanged for centuries. The yellow precious metal is a real asset that is difficult to manipulate, unlike statistics on unemployment and interest rates. Precious metal is not an abstract financial value that is created out of nothing. This is why central banks in many countries around the world still hold large amounts of gold in their reserves. When the debt tsunami hits the world, gold will be the only rock to hold on to. There is no doubt that the price of gold will continue to rise. When the value of paper currencies tends to zero, then the yellow precious metal can be worth infinitely much more!