Journey to Monetary Gold And Silver

The Journey to Monetary Gold And Silver

The comments below are an edited and abridged synopsis of an article by Alastair Macleod

Markets are just beginning to latch on to the economic consequences of the coronavirus. Central banks are slashing interest rates and beginning to throw new money into the mix, and governments are increasing deficit spending.

Few analysts have yet to understand the enormous consequences of the coronavirus for missed payments and accumulating current debt, which is rapidly draining liquidity from wholesale money markets. It is increasingly certain that the Eurozone’s banking system will require rescuing from insolvency with knock-on consequences for the global monetary system. Concern over the consequences for the $640 trillion OTC notional derivative market, particularly for $26 trillion of Forex swaps, is absent so far.

Continuing on the theme that the fates of the dollar and US Treasury values are closely bound, the extraordinary overvaluation of the bond market will translate into a collapse for both. This article charts how the collapse of the dollar and financial asset values is likely to progress and concludes that we are witnessing the end of the neo-Keynesian fiat currency fantasy.

Only then will sound money, after varying time periods for different nations, return.

Up for discussion: Setting the scene; monetary debasement will accelerate from here; comparing fiat to sound money; and where will the money go.