Tuesday, February 9, 2016

Global debt now so great nations will be forced to reprice gold higher to backstop it

Since 1971, gold has been moved into the realm of a simple commodity and away from its 5000 year old status as money.  In fact, if you currently own or sell gold the IRS designates the metal as a collectible, similar to art or classic car.  But there is one thing that may be the catalyst to force gold back to its historical and long-standing place as money, and that catalyst is debt.

Global debt is now sitting between $230 and $550 trillion (dependent upon which statistics are measured), and which is almost three to eight times greater than the world's annual GDP.  And as we see country's like Japan, Switzerland, and Sweden enact negative interest rate policies to protect themselves from insolvency, and banks like Deutsche in Germany sitting on the time bomb of $70 trillion in derivatives, assets are desperately needed to backstop this debt before it simply implodes in a tidal wave of monetary destruction.

And gold can not only be this backstop, but its inevitable repricing will be the only thing to stave off collapse on a global level.


Post a Comment