Central Banks Driving Gold

Central Banks Driving Gold

The comments below are an edited and abridged synopsis of an article by Jim Rickards

Central banks have a monopoly on central bank money. Gold is the competitor to central bank money, and most central banks would prefer to ignore gold. Yet, central banks in the aggregate are net buyers of gold.

In effect, central banks are signaling through their actions that they are losing confidence in their own money and their money monopoly. They’re getting ready for the day when confidence in central bank money will collapse across the board. In that world, gold will be the only form of money anyone wants.

As confidence in the US dollar is eroded due to Fed money printing and congressional super-deficits, investors will gradually look for alternative stores of wealth, including gold.

These trends begin slowly and then gather momentum. As the dollar price of gold really begins to soar, investors will take notice. Even more people will invest in gold, driving the price still higher.

Investors like to say that the price of gold is going up. But what is really happening is that the value of the dollar is going down (it takes more dollars to buy the same amount of gold).

This is the real inflation and the real dollar collapse most investors miss at the early stages.

Eventually, confidence in the dollar will be lost completely, central bankers will need to restore confidence, and they’ll turn to some type of gold standard to do so.

We’re a long way from that point right now. But if central banks are voting with their printing presses in favour of gold, if the super-rich and their advisors are all jumping on the gold bandwagon, what are you waiting for?

Here’s a once in a lifetime opportunity to front-run central banks and acquire your own gold at attractive prices before the curtain drops on paper money.