- Gold has strengthened as a consequence of the delusion that “money printing” will help anyone but the political and financial elite. The Bank of Japan has been printing Yen like there is “no tomorrow,” which unfortunately may describe the rather bleak future of the Japanese economy. Perhaps the Japanese and other westerners are buying gold for protection from their central bank “money printing” policies.
- There are serious financial and political issues with Greece, Spain, Italy, the European Union and the euro. Ditto for the Middle-East and the United States. Gold purchases are accelerating.
- Interest rates are currently at multi-generational lows with some European rates negative out to five or more years. This is not a sign of economic health. Since the typical “solution” is more debt, “money printing,” bond monetization, and larger deficits, investors understand the consequences of such “money printing” and have finally realized they must buy physical gold for protection.
- Perhaps the common denominator is that Central Banks and indebted governments are desperate, scared, floundering in uncharted monetary territory, lying, and manipulating many markets. Investors appear tired of central bank and government lies. Their loss of confidence is reflected in market volatility and the relative but temporary strength in the US dollar. When the US dollar weakens again the urgency to purchase physical gold will increase!
Weakening confidence in currencies, central banks, and governments will focus attention upon real money, the money that has survived for thousands of years BEFORE AND AFTER the era of central bank promises, lies, manipulations, and monetary stimulation. Gold is making a determined come-back in financial markets because it is more real than paper fiat currencies backed only by the faith, credit, and the lies of insolvent central banks and sovereign governments.
Gold is approximately $150 higher than its early November low and still long-term UNDERVALUED. Paper promises, paper currencies, and official pronouncements from central banks and governments are looking less real, more vulnerable, and likely to weaken further in 2015 and 2016.
To paraphrase Churchill, central banks will (we hope) do the right thing (back their currencies with gold) after they have exhausted all other alternatives. How much collateral damage will occur in the meantime, and what can you do for self-protection?
GO FOR THE GOLD (and silver)! It has withstood the test of time, history, the ravages of paper money, and central bank lies.
Read: Folly Triumphant by Hugo Salinas Price
The Deviant Investor