Gold price. If it continues to grow, even investors should not be happy
On the one hand it is This is again interest in purchasing those investors who invest in index funds based on gold. From around 2022, central banks are also more and more often on the side of buyers – Geopolitical uncertainty and international trend towards sanctions strengthen the departure from the American dollar (“dedolarization”) and the pursuit of gold as a reliable commercial currencywhich is independent of the third parties, especially in many non -wandering countries.
Of course, economic policy, such as the one currently conducted in the United States, which paralyzes global trade, for example through customs, and equalizes the advantage of comparative costs, thus increasing inflation, also improves prospects for gold price.
All this, however, is not a complete explanation, because it ignores the development that goes far beyond the relatively short -term changes in interest rates, duties, inflation and demand of investors in the last 20 years. To understand these changes, you must go back to 1971.
Gold bars of different sizes (illustrative photo)Sven Hoppe / DPA / PAP
A gigantic increase in gold price
Until then, the exchange rate of the Enthusias of Trojan gold was set at $ 35. [współcześnie to 275 dol., czyli około 1080 zł]. On August 15, the then President Richard Nixon canceled this promise, which was based on the “agreement with Bretton Woods” from 1944. It was the end of the global post -war world order. This decision provided a significant financial relief for the US, whose budget suffered extremely due to the consequences of the Vietnam war.
Robert Vitye – General Director of Solit Group, a company dealing in trade in precious metals and the protection of assets – describes what happened that day as a replacement of the gold dollar with a debt dollar. While the United States public debt was $ 412 billion at the time, today it is $ 36.5 trillion. [143 bln 217 mld 94 mln zł]. The level of US debt increased almost 89 times.
Goods such as gold, which cannot be multiplied to a significant extent, reflects the expansion of debt money without coverage on the free market with impressive precision over the past 50 years: the increase in its price from the then 35 US dollars to over $ 1,300 of American [12 tys. 160 zł] Currently, in the meantime there is an 89-fold increase.
While the price of gold is usually reflected in the main paper currencies, the change of perspective leads to amazing knowledge: dollar or euro in gold (instead of vice versa) show what has actually happened in recent decades – [nastąpiło] divorcement and decrease in the values of the main Western currencies.
Accelerated debt is also reflected in another phenomenon. While over 37 years have passed since 1971, before the price of gold first broke the $ 1000 limit. In March 2008, only 12.5 years passed before another $ 2000 limit was reached in August 2020. The next four and a half years took the level of $ 3,000. last week. If this trend continues, $ 4,000 It will be possible for the Trojan ounce in 2026.
Continued article under video material
Loss of trust in paper money
Does not have to [jednak] That's it. There are also significant threats to the price of gold, especially after such amazing many years of growth. US President [Donald] Trump may, for example, come up with the idea of transferring gold from the United States stocks to relieve the budget situation in the country.
A further decline in prices on the stock exchange could also lead to the fact that investors would have to liquidate their investments in gold to balance losses in other asset classes. However, every time the price of gold began to fall in recent years, there were always buyers who perceived corrections [ceny] As opportunities to buy, and thus stabilized the price.
This has a lot to do with the loss of confidence in the paper money system. The tendency to his erosion through excessive debt in Western industrialized countries remains unwavering. The main challenges, such as demographics, social expenses and defense -related consequences of the misconception of the “end of history”, make the development [tej tendencji] He is almost inevitable.
Nothing confirms this more clearly than the decision of the Old Bundestag on approval of euro billions for the German government, who had the last serious activist in favor of a sustainable budget policy in the form of the Minister of Finance [Christiana] Lindner until the end of the coalition [którą rozwiązał pod koniec ubiegłego roku ustępujący kanclerz Olaf Scholz].
Political reluctance, supported by CDU/CSU [Unię Chrześcijańsko-Demokratyczną]to the priority treatment of expenses and the danger that the new debt package will end in the re -financing of social benefits in a circular way, fits well with the observation, which “Master” Alan Greenspan, head of the American Federal Reserve in the times of new economy, wrote in his essay from 1966 “Gold and economic freedom”:
“Here is the wicked secret of Tyrad from supporters of the welfare state against gold: deficit expenses are simply a plan to expand wealth. Gold is on the path of this insidious trial.”
The consequences of the Bundestag decision for the euro cannot yet be fully evaluated. However, the doubts that international investors currently have about the American dollar are also basically referring to the euro, which is much more fragile in their construction.
Bad news for everyone
The price of gold clearly indicates the way for the policy of Western industrialized countries: from excessive excessive debt back to a reasonable budget policy, which is ready to determine priorities even when it hurts. Of course, it is unlikely that this happens on a large scale. The chances of a further increase in gold price are therefore high.
This is not good news even for the few – only 0.6 percent are now invested. global financial assets – who have yellow metal. This is due to the fact that they generally perceive gold primarily as a form of insurance against all kinds of system risks, which, as they hope, never materialize.
