Published: 2021.02.19. Gold price is an indicator of world volatility

Gold price is an indicator of world volatility - Preview

Gold is universal money. Gold is a constant in a world with ever-changing monetary policy. Anyone who has once understood how our economic, financial and monetary system works knows that the price of the precious metal will continue to rise in the long run.
The fact is that all Central Banks continue to increase the money supply at will, without limit, in order to maintain the operation of the entire System in a constant crisis. At the same time, all the currencies of the world are systematically depreciating together, which means that people do not notice this when comparing exchange rates, since currency devaluation occurs simultaneously.
And while there are no longer any restrictions on how much money can be increased, the amount of gold available around the world no longer increases by 1-2 percent per year. But not all rare items go up in price. This applies only to those things that are hard to find and at the same time are in demand from people.
Over the millennia, gold has established itself as a sustainable asset and won the trust of people around the world. That is why for a long time gold has been used to back our paper currencies. But to use the yellow precious metal as a currency anchor requires strict discipline.
However, over the past decades, gold's function as a currency anchor has ceased to work. The whole world is now living beyond its means. This can be easily seen in the huge rise in global debt.
The financial authorities of the world decided to abandon monetary discipline and bring the matter to the end, whatever it may be. It was decided to conduct an experiment on how much the bow could be pulled. There was simply no other choice. Limiting spending by tying the money supply to a stable asset is no longer desirable. Thus, the money set by the government continues to depreciate in comparison to stable gold. Therefore, the world is moving from one crisis to another. And each such crisis is solved by distributing even more government debt.
Once in this game, there is no turning back. Debts are never returned, but only covered by new debts. A person falls into the illusion of eternal growth. This will continue until, in the end, the credibility of inflationary money is completely lost. Then again, it becomes necessary to peg the fiat currencies to a stable asset. The discipline of spending is again in demand. And in this situation, gold can come to the rescue. After all, it cannot be spent more than it is available.
But before the world returns again to peg the money supply to gold, humanity will have to go through many crises. Therefore, the price of gold will continue to rise further. Gold is an incorruptible reminder of existing economic problems, so the financial authorities do not like it and try to downplay its importance to the financial world. History repeats itself sometimes because human behavior is predictable. The price of gold fluctuates, but in the long run, nothing can stop it.