Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stop Believing The 'Economy' Is The Same As The Stock Market - 12th Jul 20
Spotify Recealed as The “Next Netflix” - 12th Jul 20
Getting Ahead of the Game: What Determines the Prices of Oil? - 12th Jul 20
The Big Short 2020 – World Pushes Credit/Investments Into Risk Again - 11th Jul 20
The Bearish Combination of Soaring Silver and Lagging GDX Miners - 11th Jul 20
Stock Market: "Relevant Waves Vs. Irrelevant News" - 10th Jul 20
Prepare for the global impact of US COVID-19 resurgence - 10th Jul 20
Golds quick price move increases the odds of a correction - 10th Jul 20
Declaring Your Independence from Currency Debasement - 10th Jul 20
Tech Stocks Trending Towards the Quantum AI EXPLOSION! - 9th Jul 20
Gold and Silver Seasonal Trend Analysis - 9th Jul 20
Facebook and IBM Tech Stocks for Machine Learning Mega-Trend Investing 2020 - 9th Jul 20
LandRover Discovery Sport Service Blues, How Long Before Oil Change is Actually Due? - 9th Jul 20
Following the Gold Stock Leaders as the Fed Prints - 9th Jul 20
Gold RESET Breakout on 10 Reasons - 9th Jul 20
Fintech facilitating huge growth in online gambling - 9th Jul 20
Online Creative Software Development Service Conceptual Approach - 9th Jul 20
Coronavirus Pandemic UK and US Second Waves, and the Influenza Doomsday Scenario - 8th Jul 20
States “On the Cusp of Losing Control” and the Impact on the Economy - 8th Jul 20
Gold During Covid-19 Pandemic and Beyond - 8th Jul 20
UK Holidays 2020 - Driving on Cornwall's Narrow Roads to Bude Caravan Holiday Resort - 8th Jul 20
Five Reasons Covid Will Change SEO - 8th Jul 20
What Makes Internet Packages Different? - 8th Jul 20
Saudi Arabia Eyes Total Dominance In Oil And Gas Markets - 7th Jul 20
These Are the Times That Call for Gold - 7th Jul 20
A Reason to be "Extra-Attentive" to Stock Market Sentiment Measures - 7th Jul 20
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

In The Year 2025 If Fiat Currency Can Survive

Currencies / Fiat Currency Jun 30, 2020 - 05:40 PM GMT

By: Bob_Kirtley

Currencies

Introduction

We are presently enduring a period of great change due to the Coronavirus which has already cost many lives and inflicted untold damage to the global economy.

Alongside the damage caused by this virus the world has also entered a recession having been through an eleven-year period of expansion.

To make matters worse many nations are shouldering massive debts raising questions about the possibility of debt defaults on a grand scale.

Today we are taking a peek into what the future might look like and it is not a pretty sight.


Issues For Consideration

There is a myriad of threats to our current way of life and the global economy which include but are not limited to:

Pandemics, Trade Wars, International Incidents, Social Unrest, Civil Rights Protests, Acceleration in the speed of change, Debt default, Confiscation of Assets, etc. Much has been written on the above-mentioned issues so today I would like to take a quick look at the issue of Debt and what might be in store for us over the next five years.

The US Dollar is currently the worlds reserve currency with many commodities such oil, copper, grains, gold, etc. being traded in the main for US Dollars. As the Dollar strengthens these commodities become cheaper and visa versa. Over the recent past and for a myriad of reasons governments and central bankers have seen it necessary to create more money in order to alleviate a problem, some real and some perceived. These debts are mounting on a daily basis, not just for the US but for many nations across the globe. The US debt according to the US Debt Clock is $26.1 trillion and the Debt to GDP ratio is 131%.

There are a few ways to deal with debt such as sustained economic growth which is unlikely given that we are in a recession. A hefty dose of austerity might help but given the current hardship that people are suffering I doubt if there is the political will to propose such a policy. A period of accelerating inflation could reduce the impact of this debt, however, attempts to ignite inflation by the authorities has not materialized. To summarize we are locked into a cycle of government spending and central bank money printing which will continue until the ‘Law of Diminishing Returns’ kicks in and at that point all confidence in our leaders and our financial system will dissipate into insignificance.

The US Dollar will be tested and may well lose its status as the worlds reserve currency; however, the other currencies are not in great shape and could suffer a similar plight. Where does this leave us one ponders, back to bartering and exchanging goods and services or will we see the emergence of a new asset backed currency. A new currency could take the form of paper exchangeable for a fixed amount of hard assets which could include the precious metals and maybe property and land.

It is hard to imagine just how this would be managed but without a solid backing a new medium of exchange would lack credibility.

A solution that I believe could work would a gold backed currency, or a gold backed type of Bitcoin. I am biased as I am a gold bug at heart and see gold as a segue into a more stable, disciplined financial system that the world could utilize with confidence.

If we now compare the US Dollar to gold in terms of their performance over the last twelve months, we can see that the value of gold has increased by around 30% when measured against the Dollar. This could be an early indication of what is to come as the US Dollar loses its buying power and gold emerges as a candidate to fill that vacuum.

US Dollar and Gold Comparison Chart

Chart courtesy of Stockcharts

It is clear to me that something has got to give and so I am turning away from Fiat currencies such as the US Dollar and seeking refuge in hard assets. Land, property, and precious metals all have a part to play and will be of vital importance in the year 2025 as paper loses its fight for survival.

As investments physical gold and silver sit at the top of my list. As a speculation the gold and silver producers are worthy of consideration as they can generate spectacular returns if you can get the timing right. If your aversion to risk is cast iron, then you could consider a well thought out options trade where the risk is ever present, but the rewards can be awesome.

Conclusion

There is no doubt that the global economy is problematic, and the solution is not Quantitative Easing on steroids.

All Fiat currencies eventually attain their intrinsic value which is zero so look for alternatives to paper currencies.

Gold and silver can be acquired in small amounts and kept in your possession and not in the hands of the banks.

In the year 2025 Fiat currencies may not survive so protect yourself now by protecting at least some of your buying power for your future needs.

Take care.
Bob Kirtley
Email:bob@gold-prices.biz
www.gold-prices.biz  
URL: www.skoptionstrading.com

DISCLAIMER : Gold Prices makes no guarantee or warranty on the accuracy or completeness of the data provided on this site. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This website represents our views and nothing more than that. Always consult your registered advisor to assist you with your investments. We accept no liability for any loss arising from the use of the data contained on this website. We may or may not hold a position in these securities at any given time and reserve the right to buy and sell as we think fit.

Bob Kirtley Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules