What’s going on with Gold? Understanding the relationship between COVID-19 Deflation and Austerity Measures – September 23, 2020,
Now, unfortunately for the lower-middle-class and poor in the United States, namely those living in the pricey Democrat-run States, debasement of the U.S dollar is going to have a negative impact on the standard of living, because you’re going to have to pay for the inflated price government, which won’t deflate when the U.S dollar is debased.
With that said, Donald Trump who is trying to mimic other central banks of the world be artificially lowering the US dollars value is going to have a serious problem on his hands I’d argue at the end of 2021 IF HE IS PRESIDENT! I personally call Jerome Powell, Donald Trumps’ bitch, because Powell should have allowed interest rates to rise when he had the chance, but not only did Jerome Powell stop raising interest rates he actually began lowering interest rates before the COVID-19 pandemic hit us.
Pandemic hits, I don’t think Trump wanted to shut down the economy, but he did, interest rates drop further with no hopes in rising for the next few years and worst of all is that the world is less productive, this even includes Gold mining.
Now, what is hard for the greed of most people to comprehend is that lifes essentials take precedence, during a deflationary period. In countries like Canada and the United States where the governments have been GIVING AWAY money to prevent the economy from crashing, a lot of people imagine that this would equate to INFLATION.
No, we’re not in the Weimar Republic era, we have a far worst debt problem than the Weimar Republic could ever imagine, what this means is that if a person is smart, they’d use these Trump checks to pay down debt or at least service debt while they’re at home doing nothing.
Servicing and paying down debt in my book is DEFLATIONARY! I think people forget how a debt fueled economy works. Dave Ramsey is absolutely correct in that unless you have the ability to profit from debt do not get into debt, because when it rains it pours.
Now, a lot of the money given to people from the odd ball politicians like Donald Trump and Canadian Prime minister Justin Trudeau have gone into the stock market, but these rookie investors, investd in hopes of quick profits. They may have bought Gold as an example thinking that the price would skyrocket in a few weeks, but… Now, that there might not be any free Trump checks they have to pull out their investment, they have to sell.
I’ve seen rookie investors upclose, they can’t handle the loss. One of my strategies for raising my kids is to get them used to market fluctuations, I make my kids get into business, because Marxists, often don’t want the risk of starting a business but want all the rewards of being involved in a profitable business.
What I mean by that is that a unionized employee wants a guaranteed check every two weeks, and they don’t want to see the value of their labour declined EVER! Employees want a guaranteed wage and they want their investment profits guaranteed. They can’t stomach fluctuations because they’re not used to it, they haven’t practiced it, they haven’t used those brain muscles yet.
This is why on this blog I wrote an article titled fiat money vs. a Gold Standard in which I said openly I prefer fiat money. When it comes to money most people are still riding their bikes with the training wheels on, a gold standard currency is cut throat, in this era of entitled morons, the last thing anyone wants is for the government to do some form nationalization or regulation of Gold.
If you’re a grown up you sell and buy gold when you deem it fit to do so. Is the price of gold and silver being manipulated? Sure it is, but so are a whole bunch of other things. I live in Canada, in Canada we have a supply management system that controls the supply of dairy, poultry and eggs through production, import controls and pricing mechanisms.
These price controls are inflationary for the end retail consumer, and gives guaranteed profits for the producers. Now although in Canada particular goods don’t have sales taxes attached, whenever I go to the grocery store or even if I go to Walmart, I’m not only going to buy dairy, poultry and eggs, i might buy a T-shirt, some toilet paper some snacks, lotions etc. those items do come with sales taxes and take from my wealth. That is indeed market manipulation.
Buying and selling gold is for the big boys and girls, it’s for the adults in the room, the women and men who can stomach the temporary losses and ride this thing out. All of you looking to make a quick buck, should look where the price of gold was in the year 2000 and see where it is now.
Had you bought Gold at the year 2000 and cashed out now, you would have made out like a bandit, but most of you aren’t long term investors, you’re short term investors and I make lots of money off of you idiots! I own gold stocks, they’re all still in the green because of when I bought them, I even bought extremely risky gold stocks, that the professionals tell you are bad buys, they’re still in the green FOR ME!
Sure I have some stocks in the red, but over the years I’ve balanced out my investment portfolio, all of my wealth isn’t going into ‘my pet rock’. But I do see a lot of upside for Gold, but for myself, the downside isn’t that bad either.
I personally anticipate that the world is headed into an era of forced austerity measures. I don’t think Americans should be worried if Joe Biden wins the election, what should worry Americans is Trump’s potential SCOTUS nominees. Most of America is already Leftist and sometime in the future the Democrats are going to win an election.
The Leftist politician can make all the promises they wants, the problem is will they get passed. Obamacare was passed, I live in Canada, below is a video of the stupid crap that Americans can expect if they have Universal Health Care.
People in my immediate family had to wait years for surgery, because we have a wait in line until the government says so health care system. Now, in Canada, if you never get sick, with a disease that the Government hasn’t made a priority you’d obviously assume that Universal Health Care is the best thing in the world. But America has 300+ million people and if the U.S dollar was ever backed by Gold, I’d argue that’s a global revolution!
If there was a Gold Standard, currency the world would look different, but I can’t say definitely that things would be better or worse. Under the gold standard, there were a lot of wars, Marxists don’t give up easily, Leftists whether it’s National Socialism or Democratic Socialism, the Marxists look for everything wrong with the world and that to me is why if you’re a Gold bug like myself, you sue for peace!
The Gold, silver and now Bitcoin markets are alive and kicking, but you’d be wise to seperate emotions from reality. The reality is a sucker is born everyday, but in a market economy, a sucker is the individual who believes he/she has the ability to control the thoughts and actions of others.
The world economy is deflating and the only way to keep the economy afloat is liquidity or maybe even creating a new currency? I really don’t know, I genuinely don’t care. I love reading about Argentina because the size of the Argentine government is hilarious to me.
If you wonder why the Argentine peso has so many problems, take a look at the size of their government. The world is entering into a phase I call “LATE STAGE SOCIALISM”, I don’t think people comprehend how deflationary technology has been to the world.
In Africa, as an example the cell phone is a wallet. A cell phone gets rid of checks, base currency, tech gadgets, writing letters to people, shopping, all of this is deflationary. Just being honest the last time I went to a government office was to renew my drivers license, the other time was to buy my passport.
The government is in the way of progress ALL OF THE WORLD! I’m not sure how long it will take people to comprehend this, but the central banks aren’t the root cause of inflation, the size of government is! The Argentian central bank does what the Government tells it too.
Jerome Powell is the first Fed Chair that basically did what the President told him too, the Fed is usually accommodative to the President, but in the case of Jerome Powell, he completely changed how he governed. To save his own ass from the wrath of Trump and Trump supporters, Powell permanently screwed over the global markets by providing liquidity to companies who should have restructured or went out of business.
Well, then COVID-19 hit and what I see occurring in the world is a cash flow crisis. Unless the Fed starts blatantly printing money, no commercial bank is going to lend out money in the manner in which Donald Trump wants and this equates to an appreciating U.S dollar, now what’s so funny about this will be the bankrupted U.S States, who will assume this strengthening U.S dollar means they have the right to be bailed out, but you see the problem with currency DEBASEMENT is CASHFLOW!
There exists no market element of running a government, at best one State can compete with another U.S State, but if the private sector can’t turn a profit, the U.S dollar could trade 1-1 with Gold a cashflow crisis would still be a cashflow crisis and the only way to get out of a cash flow crisis is through productivity!
Whenever I think about what’s coming to the world I start to laugh to myself, because I know when this cash-flow crisis happens, it will be interpreted incorrectly by all the experts! I’ve listened to Argentinians and Austerity measures are off the table in Argentina, they don’t even think about. In Brazil their current President is basically Hitler for cutting the size of government even though the previous socialist Brazil President was as corrupt as corrupt can be.
Financial education as Robert Kiyosaki points out isn’t taught in schools. I have no problem with a person being a Socialist, but that person should also know about how capitalism works. THe flaw of capitalism is that it’s DEFLATIONARY! Humans are Greedy, there’s nothing natural about a guaranteed wage while the economy deflates, but that’s what a lot of humans want and come to expect.
Government workers are guaranteed wages whether or not they’re a net benefit to a society, pensions are the same, for people to completely ignore this, tells me that people don’t understand that the economy is deflating! What’s going on with gold you ask? Well, Gold is like real estate, anyone with money can buy it, but not everyone can profit from it!
I’d like to thank all of you suckers in the gold market for contributing to my bottomline. I personally do not know what will happen to the price of gold, it could retreat, it could appreciate, it really doesn’t mater to me, because I measure my gold based on it’s purchasing power, there are times spending fiat dollars makes more sense, there are times when using my gold holdings to purchase other assets make sense to me, my pet rock get’s exercise it even pays me a fiat currency valued dividend sometimes.
I’m also big on silver, unlike Diamonds, it’s unlikely there will ever be lab-grown silver, meaning that I see Silver reaching a new HIGHER bottom in the future. The positive about the modern Left is that many of them still value their freedom of speech, so I suspect, the far left in the not so distant future is going to see their influence on society shrink.
If Donald Trump wins the U.S election in a landslide, the far left is dead, if Biden wins the 2020 election, eventually the Democrats are going to get annoyed with their far-left elements. Progressives are annoyed with the socialists now, even Joe Rogan who is a Bernie Sanders supporters appears annoyed with the Far left to the point that he might lose his contract with Spotify.
The Far Left is a lot like the religious over-reaching Conservatives of old, nobody likes an authority figure breathing down their necks all the time, telling them how to live their life. Even in China a lot of people are fed up with the Chinese Communist Party over-reach. I see the far-left getting major push back in the future and this is good for Liberty, what I don’t know is how we get to Liberty.
More and more people are waking up, that eventually the big government ruins your life, and even if a person doesn’t know what’s wrong exactly, they have an idea or a feeling something is wrong. Deflation to an economy is usually a wake up call to society and this wake up call presents a lot of opportunities for people long on Gold! The decline in gold price I would ask you is a decline based on your perceptions of the future!
Interesting times ahead!