Why You Should "Follow the Money" on The Yellow (and Silver) Brick Road / Commodities / Gold & Silver 2019
Sincethe Federal Reserve detached the dollar from the gold standard in 1971, theworld's central bankers – with the Fed leading the charge, have flooded theworld with fiat currency to the point of diminishing its purchasing power toshadow status.
Acommon belief during the early decades of the former Soviet Union's rise after1917 was that, according to Marxist-Leninist theory, the West and capitalismwould either self-destruct, or be "buried" by the superior economicplatform being constructed for the proletariat by the USSR, and later CommunistChina.
Buteven the Great Depression, which in the West lasted from the Crash of 1929, andarguably into WWII, failed to do the trick.
Muchlater, in a case of great historical irony, the West received a Christmaspresent of sorts, when on December 26, 1991 the Supreme Soviet voted itself andthe USSR out of existence!
However,to say that the world is moving into uncharted waters as we head into 2020could turn out to be a monumental understatement!
Onthe surface, the U.S. still enjoys – so far – a 10-year stock market bull run,record low employment, and fairly stable consumer prices. But under the hood,we're piling up massive long-term debts which have little chance of being paidback at anything near today's purchasing power.
Pouringmore paper and electronic bytes into the system in order to stimulate growth ishaving the opposite effect. Consider the €15 trillion in Eurozone-issued paper,now literally paying less than nothing and accomplishing about as much.
Fiatcurrency simply floats to the top of the heap where it fuels market bubbles,stock buybacks, bigger management bonuses, and investments in billion-dollar(non)startups like WeWork.
Themiddle class once looked forward to "clipping" bond coupons duringtheir "golden" years but are now being greeted with what the Bank ofEngland calls "the lowest interest rates in 5,000 years."
Meanwhile,Russia has become the world's third largest gold producer (after China andAustralia) and continues to import even more, with central banks doing thesame!
Slowlythe “powers that be” are starting to come clean about their (private) love -(public) hate relationship with gold, hinting that it just might have someredeeming features. The Dutch National Bank recently said:
"Gold is… thetrust anchor for the financial system. If the whole system collapses, the goldstock provides a collateral to start over. Gold gives confidence in the powerof the central bank’s balance sheet."
Sothere you have it!
Ourfinancial crystal ball is still a bit cloudy right now,but it's not a stretch to consider that the global financial tectonic platesare under considerable stress as multi-causal socio-political factors conspireto grind them ever more tightly.
Keepingin mind that the pronouncements of news outlets on the mainland tend to closelyalign with the views of Bejing's rulers, and that the Party speaks of importantmatters obliquely, the Global Financial Times, China recently had this to say:
So the gold standard is an effort bythe world market and financial system to balance the "Trumpianfuture." It means that the US can take its own path and Americans willhave the right to look after themselves, but other countries around the worldwill also have the right to make their own choices.
In other words this will be a processof rebalancing in the world financial market, forcing the US to face up toproblems. It needs to make a choice: fulfill the obligations andresponsibilities for international finance, or abandon the international statusof the dollar, thus allowing the dollar to become a common currency...
For the US, thegold standard is a choice that cannot be avoided. The existence of the choicematters a lot. Central banks would increase their holdings of gold reserves toprepare for the return of the gold standard. Gold prices will rise. Besidesthat, the most important thing is whether the US is willing to accept any bigchange or wants to return to the old financial order...
Inshort, it's an odds-on bet that over the next few years, profound structuralchanges are in store for the world financial system.
AsChina, Russia and other key players attempt to "re-rate" the USdollar from Reserve Currency, top-dog status to "a common currency,"we should pay attention and adjust our personal financial profiles accordingly.
The Veterans Day 2019 $5.50 Silver Spike
OnVeterans Day, in thin market conditions, an intra-day silver spike turned outto be a false signal. But what if it had been for real and on the open for thenext trading day, the price had held, or even moved up to $25? And you had nosilver? What now, sport?
Oneof these days, a surprise move like this for both gold and silver could be for real.
Wedon't need to predict exactly when in order to protect ourselves and make surewe're "involved" by having some metal insurance. Why allow ourselvesto be relegated to the status of long-term spectators – minus the binoculars?
Oncegold gets a few closes above its intermediate high around $1,575, perhapsbefore year end or soon thereafter, it will be motivated to run toward the next"resistance" level around $1,700 – as a start.
Sodon't wait to act until the obvious is well under way. Get yourself positionedto play the long game and the Big Move.
AsNick Barisheff succinctly puts it, “The small minority of wealthpreservationists will sleep well with their physical gold and silver, whilstthe majority of the asset management industry are likely to have nightmares formany years.”
Actsoon to acquire enough physical gold and silver so you can sleep well, countingyour Maple Leafs and Silver Eagles, while others are counting sheep...or sitting up in bed with a bad case of FOMO – the Fear Of Missing Out.
David Smith isSenior Analyst for TheMorganReport.com and a regular contributor to MoneyMetals.com aswell as the LODE Cryptographic Silver Monetary System Project. He hasinvestigated precious metals’ mines and exploration sites in Argentina, Chile,Peru, Mexico, Bolivia, China, Canada and the U.S. He shares resource sectorobservations withr eaders, the media and North American investment conferenceattendees.
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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