Banks

The beginning of the end of the current monetary system started exactly 50 years ago. In the next few years the world will experience the end of the end of another failed experiment of unlimited debt creation and fake fiat money. Measured in collapsing paper money, gold and silver will reach unthinkable levels.

Ronnie Stoeferle and Egon von Greyerz question why, despite explosive money printing and obvious inflation, gold has not long since been quoted much, much higher. How long will it take for gold to reflect inflation and astronomical money creation and break through the long overdue price forecasts of well over USD 10,000 per ounce?

The true price of gold and silver will be the one that is displayed after the shift from paper to physical. The current price reflects precisely the preponderance of the financial market over the market for real assets. But for how long?

Gold is reflecting the devaluation of paper money, but so far it is not doing so. Use the opportunity, because it will live up to its role.

From a market perspective, there was one important lesson from both 1940s and 1970s periods: At times when investable assets yield less than inflation, owning tangible assets becomes imperative. Commodities were far-and-away the best performing asset class in both of those decades.

The sales of futures on the COMEX market, now seen almost every day, are colliding with a background trend for the purchasing of gold by the other central banks, which are starting to lose patience and want to cover themselves in relation to the risks of devaluation of their assets in terms of state bonds and currencies, which are significantly impacted by the current levels of inflation.

In the short term, the paper gold market certainly harms the only genuine gold market which is physical. But artificial markets or instruments have never survived in history. Just look at the fact that every fiat currency in history which has failed. And so will paper gold. It is only a matter of time.

Banks clearing gold trades in London can apply for an exemption from tighter capital rules due in January 2022, a British regulator said on Friday, removing what some said was a threat to the functioning of the market.

The American and European central banks - the Fed and the ECB - would have us believe that they will be able to raise their key rates when the time comes. In reality, they will have to choose between several crisis scenarios.

Real interest rates are negative in the U.S. across all maturities, which is in favor of gold. While debt is exploding and depreciating, the ratio of debt to GDP is also rising. There will be no return to normalcy. Collapse is inevitable when the paper money created loses its effect. And it will drag the banks into the abyss, which is why they want to strengthen them first with Basel III.