3 Dozen Reasons to Hold Gold
The comments below are an edited and abridged synopsis of an article by Egon von Greyerz
The world’s financial system has been in a euphoric state since 2009. It seems that the Keynesians, like Krugman or the Modern Money Theorists, are right after all. All asset markets are near the highs and show little sign of changing direction. As Treasury Secretary Mellon said in September 1929: “There is no cause to worry. The high tide of prosperity will continue.” All that is required is more of the same medicine, more credit, more money printing to make a virtuous circle of eternal prosperity.
Clearly the Cassandras are all wrong with their pessimistic forecasts that never happen (Cassandra had the ability to forecast the future, but her curse was that nobody believed her accurate predictions).
Cassandras today are in the same position. They are certain that the theories based on spending and borrowing yourself out of the biggest debt bubble in history are totally fallacious. They know that a debt problem cannot be solved by more debt. No one defined it more succinctly than Albert Einstein: “We cannot solve our problems with the same level of thinking that created them.”
Up for discussion: The party is over; the world needs statesmen and stateswomen; the final seconds of a global mega bubble; global debt is up 3x since 2000; protection is critical; $30,000 gold and $3,000 silver; three dozen reasons to hold gold as insurance; and China’s insatiable appetite for gold.