Gold And A Drive down Memory Lane
The comments below are an edited and abridged synopsis of an article by Andy Hoffman
For most of history, gold was money. The currencies that circulated were silver, gold or paper backed by silver and gold. Times have changed.
In 2018, we live with huge piles of unpayable debt. There are consequences to this debt: it cannot be repaid except by additional borrowing; debt owners believe it is an asset, and they expect payment plus interest; rising interest rates make debt more onerous; few people, businesses or governments want the debt-based system to change; since no politicians and few corporate CEOs expect to repay debt, their promises to repay are bogus; commercial and central bankers create more debt daily so debtors can pay interest, enabling government deficit spending; a system based on debt is neither real nor sustainable.
Hoffman discusses gold from 1910 to date and speculates on what will happen in the future. In conclusion:
“The Chinese and Russians took advantage of low gold and silver prices during the two decades from 1998 to 2018 and hedged against devaluing debt and currency units. They dumped Treasury paper, built infrastructure, and accumulated gold and silver bullion.
Western nations sold gold bullion and enlarged their piles of unpayable debt. They weakened their economies and reduced their importance in the global economy by depending upon ever-increasing debt.
Politicians and bankers in the west ignored the golden rule, ‘He who has the gold makes the rules.’”