However, standing your ground is not enough in this time of runaway fiat money creation, in a time period in which the stock market is rallying back to all time highs, despite the fact that businesses are going bankrupt all around us, despite the fact that social upheaval is at all time highs.
No, precious metals should be doing better and mark my words. They will do better in the coming months, in the coming years.
The world has entered into a new era, an era in which fiat money is created in such vast quantities, so frivolously, that it is becoming increasingly more obvious just how bogus our fiat based money system is, with each passing day.
Debt Creation is Out of Control
As I have pointed out in previous articles, the debt level of the entirety of the world has ballooned higher since the start of the COVID-19 crisis, however, there is one country that has outdone all others, the United States of America.
(Source, SRSrocco Report)
Looking at the chart above, you would say "hey, whats to see here", or "more par for the course!" and at first glance, you may be correct in this assumption, until you look at things just a little more closer, in just a slightly higher resolution and thus in more detail;
Now that does not look good...
As the chart above indicates, the average daily increase of U.S. public debt from 2007 to 2019 was $4.4 billion, which is absurd in its own right and completely unsustainable. However, this is just a drop in the bucket when compared to how much of a dumpster fire 2020 is shaping up to be.
What you have to realize from the first chart shown is that U.S. public debt has already increased by approximately $3 trillion since the end of Q4 2019, to roughly $26.1 trillion total today.
This rapid escalation in debt creation becomes even more startling when you look at the second chart and understand just how fast, how quickly things are spiraling out of control, with only 116 working days passing when the chart was created, meaning that the average increase in U.S. public debt is increasing by approximately $25 billion PER DAY in 2020!
This is five times the average of 2007-2019... to say this is not good, would be an extreme understatement.
When the Fiat Money Comes Home to Roost
At the present time, this money is flowing into the stock market and as is typical, going to those who are already fabulous wealthy, while many continue to suffer and just get by, however, there will come a day when this newly created money begins to enter back into the system, flooding the world and causing many real world assets to rocket higher in prices.
Precious metals will be one of the chief benefactors of this new era, accounting for all of this newly created money and resetting at new ever increasing highs.
"Smart money" is already hedging their bets and buying depressed hard assets, such as energy and precious metals, they have been doing this throughout the course of this crisis and will continue to do so in the coming months and years, as they can see the sun setting on the horizon, the day of fiat reckoning that is rapidly approaching.
Both gold and silver bullion have stood their ground throughout the course of this year, with gold bullion up by 28.11% year over year and silver bullion up by 16.3% year over year, significant gains, but nothing compared to what is coming.
I believe we are going to see ever increasing highs as more and more people begin to flee the paper ponzi scheme, seeking the protection of precious metals and other tangible hard assets, I believe that the lofty projections of some analyst who predict $5000 per oz gold prices are not going to seem so unreasonable in 2-3 years.
Also, I believe that silver bullion due to its dual nature of being a vital resource in many industries, plus a hard money asset, will result in its gains greatly outpacing that of gold, as the gold to silver ratio returns to a much more reasonable and historic average.
However, we live in a highly manipulated world, where up is down and down is up and in this new bizzaro world, it is anyone's best guess as to when the true takeoff is going to happen.
In the meantime, enjoy these prices, they may never be this cheap again and as always, keep stacking.
- Source, Nathan McDonald via the Sprott Money Blog
