Monthly Archives: July 2019
“In modern times the lessons of Zimbabwe and Venezuela point to the catastrophic effects that can follow when a corrupt or incompetent government finances its lavish spending by printing more of its currency. The Gold Standard favors the countries that have gold deposits, but it has the advantage of making it difficult for governments to inflate prices by expanding the money supply. It engenders long-term price stability because the money supply can only grow at the rate at which gold is produced. Inflation can come, though, if a major new source of gold is developed, as happened with Spanish gold from the New World, or with various ‘gold rushes.'”
USAGOLD note: As we have said here so many times over the years, the best recourse for the average investor in the absence of a gold standard is to put one’s self on the gold standard through physical ownership of gold coins and bullion.
Repost from 3-15-2019
“President Donald Trump has already given the global economy trade wars. Now there are signs he may be gearing up for a currency war, too. With a series of tweets on Tuesday aimed at the European Central Bank and an announcement by Mario Draghi, its president, that he was prepared to cut interest rates further below zero in response to Europe’s slowing growth, Trump made a rare American presidential intervention into another economy’s monetary policy.”
USAGOLD note: We mentioned yesterday that the series of tweets directed at Mario Draghi was also aimed indirectly at the Federal Reserve. We would not be surprised if the trade war morphed to a trade/currency war. The Trump administration is many things to many people, but the one thing it is not is naive enough to allow its adversaries to use currency depreciation as a means to circumvent the sting of tariffs. For that to occur, though, it will need the co-operation of the Fed hence the heavy pressure for easy money policies.
Repost from 6-20-2019