The phony wealth effect and gold
“Clearly, from these numbers, there are far more players of the musical chairs game than there are chairs. Claims against the real economy have grown exponentially faster than the economy that must meet those claims. Either real GDP must rise at an unprecedented pace or the value of financial assets must fall precipitously. We have a huge phony wealth problem which is unsustainable and it cannot be fixed by monetary policy that has as it method the printing of more claims. What is the resolution of this mismatch of real vs. financial assets? Investors will begin to flee to reliable value that protects their wealth and purchasing power. We think that inevitably means fleeing to the backing of gold.”
USAGOLD note: A well-written short article on the nuances of real value. . . .And why “gold as its own settlement” is important.
Repost from 7-10-2019