, IncWhen currencies become worthless, the price of gold will be meaningless.
April 1, 2011 - What do you think would happen to the gold price if a government told its 1.3 billion citizens to buy gold? Well, China took that direct route last week in a message from the People’s Bank of China says Robert Lenzner in Forbes. Even as the country takes measures to counter inflation and bolster the yen in a bid to become the new reserve currency, they recognize the need to hedge their bets.
It is not a coincidence that four major currencies - including the dollar and the new currency darling, the Swiss franc - experienced a drop compared to gold the same day. The Chinese, who are adamant about wealth preservation, are certain to take the message to heart while Americans follow their government’s lead and continue to fritter theirs away gambling on Wall Street.
There’s a message here and America needs to listen up if we want to have any chance to stay on top: There is no future in fiat money. Hyperinflation is not some remote possibility; that die has already been cast.
There is a big difference between inflation and hyperinflation. The former is the decline of one currency relative to others. That is not a terminal condition.
Hyperinflation, on the other hand, “occurs when a currency is abandoned all together,” says Graham Summers in a Gold Eagle editorial. And that happens, as it did in Germany following WW I, when “the financial elite [engage] in insane monetary policies using public funds without care and trying to devalue the currency in order to inflate away the debts.” Sound familiar?
the world’s third largest economy is reeling under the devastation of an unprecedented hat trick of disasters - earthquake, tsunami, and threat of nuclear meltdown. Already saddled with debt double its GDP there are few options other than printing more yen.
The club of money printers is rapidly growing, representing an ever greater share of the global economy. Hyperinflation on a global scale should scare the dickens out of everybody, and that is the inevitable destiny of fiat money.
Gold will be the only port in the storm. When currencies become worthless, the price of gold will no longer have meaning - its value will be measured by its fair exchange for all goods and services.
Stewart Lawson
Senior Staff Writer - GoldPrice.net
