Financial crisis

The current high inflation could theoretically transform into hyperinflation, disinflation, stagflation, or deflation. What does each mean for gold?

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.

After years without substantially changing the amount of gold in its international asset reserves, the Brazilian Central Bank headed by Roberto Campos Neto bought 41.8 tons of the metal in June.

There are two dimensions to the global de-dollarization that is taking place: a digital one, and a golden one. Let it be noted that China, as the primary initiator of CBDCs and the number one consumer and importer of gold in the world, has every chance of doing well out of this Great Game.

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.

Gold is an eternally stable asset. It has one of the lowest levels of volatility one can find anywhere on the stock markets. What’s more, variations of an extreme nature are very rare. Furthermore, by contrast with most other assets, the absolute gold variations demonstrate stability and a high degree of regularity. Finally, the study of the statistical strength of return at 180 days indicates that gold is not overpriced.

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.

With the CPI annual inflation rate spiking 5% in May, gold could have gained a lot in response. However, it rallied only $20. Should we prepare for more?

Egon von Greyerz and Matthew Piepenburg address the current and ever-evolving inflation narrative as well as its inter-relationship with interest rates. This relationship has a direct impact upon gold pricing in a global backdrop of rising and unsustainable debt levels.

French President Macron told a news conference he would like the sale of gold reserves to help finance this planned aid for Africa.