Love. Fear. Inflation. A Precious Metals’ Trifecta

Chindia - the 800 Pound Demand Gorilla

Chindia – the 800 Pound Demand Gorilla

Inflation: For a number of years, an inflation vs. deflation debate has raged. Deflationary analysts believe that the coming massive debt repudiation, at some point inevitably taking place as the misguided, unpaid-for-spending is unwound, will take asset prices – including precious metals – down with it.

But this perspective fails to consider that central banks – foremost among them the Federal Reserve (simply a central bank by another name) will absolutely do everything in their power to avoid an asset crash.

Fed policymakers will print, literally and digitally, “as much as it takes” to keep this from happening.

They want and need inflation to keep their game going as long as possible. Not to mention that the government’s massive deficits get paid off in worth-less money. Politicians can continue spending paper promises, get re-elected, and reward their political allies.

Stewart Thomson of

By David Smith, Money Metals Exchange

Going forward, there are – and will continue to be – three primary drivers of global physical gold (and silver) demand.

During certain times in the past only one or two of these elements provided most of the momentum.

However, as we move into 2019, and for possibly the next 5-10 years, all three will be in play. They will operate synergistically to consistently motivate increased precious metals’ buying around the globe. This will happen, even as meeting that demand with sufficient new supply becomes problematic.

The term “synergistic” is used here on purpose. By definition, it relates to “the interaction or cooperation of two or more organizations, substances or other agents to produce a combined effect greater than the sum of their separate effects.”

The Three Demand Drivers for Precious Metals

Fear: Not just about social and economic unrest, but also – as prices begin to move up and away – fear of missing out!

People buy gold (and silver) as insurance, as an easily saleable for cash when needed option, and as a last ditch “get out of Dodge” ticket when the local currency has been “burned” due to government mismanagement and corruption.

Ask Vietnamese in the 1970’s or Zimbabweans, now in their second currency-destroying hyperinflation in recent memory. Ask Argentines facing their 9th currency-extinction event in modern history, or Venezuelans today.

Fear manifests itself today in the current roller-coaster ride of the larger stock markets (DOW/S&P, etc.), the student debt trigger (at almost $1.5t, much of which is in arrears), liquidity draining by the Federal Reserve, and record levels of overall U.S. debt.

Love: The Chinese New Year celebrations are coming into view… Gold demand from China and India (Chindia) has been consistently higher for the last decade – with no signs of tapering.

This is taking place because history and custom pretty much ordain it. With incomes rising in both countries, this solidly entrenched demand trend is set to continue for the foreseeable future.

Chindia – the 800 Pound Demand Gorilla

Inflation: For a number of years, an inflation vs. deflation debate has raged. Deflationary analysts believe that the coming massive debt repudiation, at some point inevitably taking place as the misguided, unpaid-for-spending is unwound, will take asset prices – including precious metals – down with it.

But this perspective fails to consider that central banks – foremost among them the Federal Reserve (simply a central bank by another name) will absolutely do everything in their power to avoid an asset crash.

Fed policymakers will print, literally and digitally, “as much as it takes” to keep this from happening.

They want and need inflation to keep their game going as long as possible. Not to mention that the government’s massive deficits get paid off in worth-less money. Politicians can continue spending paper promises, get re-elected, and reward their political allies.

Stewart Thomson of Graceland Updates identifies the critical distinction which practically guarantees that inflation will become the desired outcome, for as long as humanly possible. He states:

When a financial crisis …read more

Love. Fear. Inflation. A Precious Metals’ Trifecta

Chindia - the 800 Pound Demand Gorilla

Chindia – the 800 Pound Demand Gorilla

Inflation: For a number of years, an inflation vs. deflation debate has raged. Deflationary analysts believe that the coming massive debt repudiation, at some point inevitably taking place as the misguided, unpaid-for-spending is unwound, will take asset prices – including precious metals – down with it.

But this perspective fails to consider that central banks – foremost among them the Federal Reserve (simply a central bank by another name) will absolutely do everything in their power to avoid an asset crash.

Fed policymakers will print, literally and digitally, “as much as it takes” to keep this from happening.

They want and need inflation to keep their game going as long as possible. Not to mention that the government’s massive deficits get paid off in worth-less money. Politicians can continue spending paper promises, get re-elected, and reward their political allies.

Stewart Thomson of

By David Smith, Money Metals Exchange

Going forward, there are – and will continue to be – three primary drivers of global physical gold (and silver) demand.

During certain times in the past only one or two of these elements provided most of the momentum.

However, as we move into 2019, and for possibly the next 5-10 years, all three will be in play. They will operate synergistically to consistently motivate increased precious metals’ buying around the globe. This will happen, even as meeting that demand with sufficient new supply becomes problematic.

The term “synergistic” is used here on purpose. By definition, it relates to “the interaction or cooperation of two or more organizations, substances or other agents to produce a combined effect greater than the sum of their separate effects.”

The Three Demand Drivers for Precious Metals

Fear: Not just about social and economic unrest, but also – as prices begin to move up and away – fear of missing out!

People buy gold (and silver) as insurance, as an easily saleable for cash when needed option, and as a last ditch “get out of Dodge” ticket when the local currency has been “burned” due to government mismanagement and corruption.

Ask Vietnamese in the 1970’s or Zimbabweans, now in their second currency-destroying hyperinflation in recent memory. Ask Argentines facing their 9th currency-extinction event in modern history, or Venezuelans today.

Fear manifests itself today in the current roller-coaster ride of the larger stock markets (DOW/S&P, etc.), the student debt trigger (at almost $1.5t, much of which is in arrears), liquidity draining by the Federal Reserve, and record levels of overall U.S. debt.

Love: The Chinese New Year celebrations are coming into view… Gold demand from China and India (Chindia) has been consistently higher for the last decade – with no signs of tapering.

This is taking place because history and custom pretty much ordain it. With incomes rising in both countries, this solidly entrenched demand trend is set to continue for the foreseeable future.

Chindia – the 800 Pound Demand Gorilla

Inflation: For a number of years, an inflation vs. deflation debate has raged. Deflationary analysts believe that the coming massive debt repudiation, at some point inevitably taking place as the misguided, unpaid-for-spending is unwound, will take asset prices – including precious metals – down with it.

But this perspective fails to consider that central banks – foremost among them the Federal Reserve (simply a central bank by another name) will absolutely do everything in their power to avoid an asset crash.

Fed policymakers will print, literally and digitally, “as much as it takes” to keep this from happening.

They want and need inflation to keep their game going as long as possible. Not to mention that the government’s massive deficits get paid off in worth-less money. Politicians can continue spending paper promises, get re-elected, and reward their political allies.

Stewart Thomson of Graceland Updates identifies the critical distinction which practically guarantees that inflation will become the desired outcome, for as long as humanly possible. He states:

When a financial crisis …read more