Savneet Singh from Gold Bullion International shares thoughts on Davos and gold
Gold’s importance has never been as great as it is today, relative to the limited understanding of why it is important.
Here, we place gold within the world economic, political and social context.
World leaders from all walks of life have been gathering in Davos.
It is important for them to realize that the current solutions that have been chosen to deal with the financial systems problems are easy, lazy solutions.
The value of gold is rising because owners of capital realize that their capital is being debased by the world’s authorities. Ultimately, gold is not just a commodity or a currency. It is an asset with links to power, wealth, political control, history, freedom, moral values and even the direction of culture.
We are currently in a period where the world’s monetary and fiscal authorities have chosen to debase their currencies, either by suppressing interest rates artificially (USA) or by actual policies forcing their currencies to weaken (Switzerland).
The acknowledgement that debasement is a viable solution to problems that have grown over the past 30 years is now more or less acknowledged as the right and proper course of action.
Each of the three main economic players on the stage (the US, Europe and China) currently maintain negative real interest rates and perform some sort of asset purchasing, asset support programs. Free market principles and the discipline that they bring with them are now gone from the scene.
Answers to current economic problems, which themselves were brought on by excess and leverage, are now being solved with added leverage, tinkering and ultimately debasement.