What we’re seeing in Japan and Europe (and maybe Canada?) is an admission that “central banksters” don’t know a damn thing. We’ve also discovered that their oh-so-noble reasons for a fiat system are utter garbage. But I’m not really surprised.
After all, most of the people working at central banks are disciples of Keynes, so they’re either liars or just plain stupid. Aside from the sheer lunacy of negative interest rates, they’ve made simplistic arguments that just don’t fit with reality.
Their circular logic is mind-boggling. For instance, Keynesians believe that printing more money doesn’t debase your currency. But the argument they give for monetary stimulus is that it makes your exports more competitive. Wait a second…don’t the exports become more competitive because of a cheaper currency?
They’re contradicting themselves! Any sane person knows that you can’t keep printing more money to solve your problems. All that happens is you create a bigger bubble.
Currency Depreciation Increases Gold Price Potential
The rapid growth of paper money is the first reason you should divest your savings into gold bullion. It’s become the fashion for central banks to keep expanding their bank sheets endlessly. Either through low interest rates or outright QE, these central banksters are robbing our money of its value.
Let’s do a quick tour of the world…
Japan recently pushed its sovereign debt yields into negative territory to boost its exports. It didn’t work. Markets are simply fed up with central bankers waging a war against savers and all in the name of economic growth. (Source: “Bank of Japan Faces a New Opponent on Negative Rates: Main Street,” The Wall Street Journal, February 18, 2016.)
Why should the people who saved their hard-earned cash have to PAY a bank or bondholder to keep it safe for them? It is the ultimate liberal scam to transfer income down the ladder, a cash grab by those who can’t build their own wealth.
And where did Japan get this brilliant idea? Well, from Europe obviously.
Germany, Switzerland, Sweden, and Denmark all saw their sovereign debt yield negative returns. And even as lenders were being punished for the “crime” of being wealthy, bureaucrats in Europe were plotting other ways to blow up the economy.
The EU Commission moved to outlaw the 500-euro note from circulation, a move it claims is to crack down on money laundering. But, it sounds suspiciously like the start of a cashless society, one where all our transactions take place under the watchful eye of Big Brother. (Source: “EU finance ministers call for restrictions on €500 note over crime fears,” The Guardian, February 12, 2016.)
They want to abolish all payment methods beyond their control. That is the second reason to run from fiat money as fast as possible. Someone needs to give these clowns a lesson in the values of private property, freedom, and basic economics.
Why Gold Bullion Instead of Gold ETFs
In case you haven’t gotten the picture yet, central banks are diluting all the fiat currencies in existence. The only true form of money is a precious metal like gold, which is grounded in a physical value. We only have as much of it as the earth has to offer.
But there are different ways to own gold. Which one is the best way? Should you go bullish on mining stocks? Or is it more reasonable to own an index fund, which tracks the price of gold? We say neither. Here’s the final reason you should opt for gold bullion.
Occam’s razor is a philosophical principle that says the simplest answer to a question is usually the correct one. That’s why we say that if you want more exposure to gold, then just buy real gold. You have no way of verifying how much gold an index fund truly holds. It could be 10 tonnes or 10 ounces. But you can always weigh your own supply.
Our personal preference is always to buy gold bullion from a local dealer. It’s reassuring to know that we are protected from the follies of Keynesian central bankers, no matter how much they print. We know that when their bubble bursts—leaving them gasping for air—our gold bullion will still be shining in all its glory.
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