US Drowning in Debt | The Gold Standard 2402

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In the latest installment of The Gold Standard podcast, our hostess, Jennifer Horn, and her guest, Ken Russo, Senior Vice President of the Midas Gold Group, discuss the current state of the economy, some of the warning signs of things to come, and what you can do talk help protect your finances. Ken urges listeners to protect their wealth. One such avenue is the age-old practice of having some exposure to precious metals like gold and silver. To understand this better, we look back to that pivotal moment in history when President Nixon made a game-changing decision in 1971. It was a decision that forever altered the course of US currency and the economy.

What Happened in 1971

President Richard Nixon made the historic decision to take the United States off the gold standard in 1971 to respond to various economic challenges and pressures. One primary purpose was to give the US Government more control and flexibility in managing its monetary policy, particularly in times of crisis. By decoupling the US dollar from the fixed exchange rate with gold, Nixon aimed to combat inflation and stimulate economic growth. However, it also had consequences for the dollar’s value. Since 1971, the dollar’s value compared to gold has fluctuated dramatically. For example, in 1971, an ounce of gold was valued at $35, but by 2024, the price of an ounce of gold had surged to over $2,000.

The Dangers of Printing Currency

Currency loses its purchasing power when there’s an excess of it chasing after a limited supply of goods and services. Today’s financial system relies on fiat-based elastic monetary principles powered by fractional reserve banking. When banks originate loans, they create new money, expanding the money supply. However, this money supply expansion ultimately leads to debasement if productivity can’t keep pace. Ironically, governments benefit from currency debasement, as seen in the US, where the Federal Reserve targets 2% annual inflation.

CBDC is Coming

The advent of Central Bank Digital Currencies (CBDCs) appears to be an inevitable development in the global financial landscape as the world embraces digital technology. CBDCs, representing digital versions of a nation’s fiat currency issued and regulated by its central bank, have emerged as a response to the need to modernize monetary systems. These digital currencies aim to offer the best of both traditional banking and modern technology, with central banks asserting that they will enhance transactional efficiency, streamline transactions, and improve global remittances. While those things might be true, Central Bank Digital Currency also faces significant challenges, particularly in terms of privacy, security, and centralization, making uncertain their future impact on global finance.

What About Silver?

As of today, the spot price of silver is experiencing noteworthy movements in the market. Silver, often called “the poor man’s gold,” has gained attention from investors and those seeking enforced savings. While it tends to follow the trends of gold, silver typically exhibits more significant price volatility, which makes it an attractive option for investors looking for potential short-term gains. Moreover, silver has a wide range of industrial applications, from electronics to solar panels, which adds to its intrinsic value.

Manipulation & Suppression of Silver

Ken presents a good case that a few large banks regularly suppress and severely manipulate the price of silver. In 2020, JP Morgan Chase was fined $920 million for manipulating the gold, silver, and bond markets. And this wasn’t the first time. Two 2010 lawsuits accused JPMorgan Chase and HSBC Holdings of manipulating silver prices. Large banks like JPMorgan Chase have faced allegations and legal consequences for their involvement in suppressing and manipulating the gold and silver markets to their advantage. The misconduct by JPMorgan involved a pattern of manipulation in precious metals. This case illustrates the ongoing efforts by regulators and authorities to crack down on market manipulation and illegal trading practices within the financial industry.

Be Financially Prepared for Chaos

Gold and silver are steadfast pillars of stability and resilience in today’s ever-changing landscape. These precious metals offer many options for individuals and investors to help prepare themselves for upheavals and chaos. Whether it’s preserving wealth, diversifying investment portfolios, or securing enforced savings, gold and silver have consistently proven their worth throughout the history of civilizations.

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