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Gold Prices Benefit From Economic Sins

Governments, such as the United States, United Kingdom, Europe, and Japan, spend their paper currencies as if tomorrow will never come. They act as if they believe debts can increase forever, more money will always be available, and debts can be rolled over forever. A recent US vice-president even stated that “deficits don’t matter.” Such economic sins may help the financial elite but they ultimately hurt most people and most economies.

Governments pretend they don’t know there are consequences to actions, bills must be paid, and nothing lasts forever. Government actions are equivalent to an individual announcing, “I can’t be out of money, my credit cards still work.”

Most governments spend much more than their income and borrow the difference

economic sin # 1. The result is a larger money supply and increasing debt. Eventually the central bank begins “printing money”

economic sin # 2. Consumer price inflation accelerates and angry citizens watch as their capital, savings, and pensions are consumed in the fires of government created inflation

economic sin # 3. A diversion, such as another war or invasion, is then needed

and economic sin # 4 commences.

Prognosis: more spending, more debt, and the cycles of economic sins and economic destruction will continue.

Conclusions:

· Gold has been a store of value for 5,000 years. It has protected people from inflation, wars, and irresponsible governments during the last several thousand years. Gold has not always and forever been a good investment – the price of gold declined between 1980 and 2000.

· But gold is currently excellent insurance against counter-party risk, consumer price inflation, central bank “money printing” and the consequences of the economic sins committed by irresponsible governments and central banks.

· Gold (and silver) prices have bottomed and will move up substantially for several years.

Source Gold Seek

 

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