Why Jim Rogers Is Buying Silver Over Gold Right Now!

[GoldCore]

It was another interesting start to the week this week, with the announcement from President Biden that he would no longer run for another term. 

 

We believe that this has significantly changed the dynamics of the US election, and judging by the markets' reaction, we're not the only ones who think so. The Presidential race is now likely to be a close one and we will be watching the next few months with interest. 

 

If you're wondering what the implications of the US election on the gold price might be, wonder no longer. A report released by the World Gold Council concluded that the outcome of the election will not have a direct impact, instead we need to look at the bigger picture,

 

"our analysis of gold and US presidential elections suggests that gold is not reacting directly to party affiliation or changes in leadership. Rather, it highlights the relevance of key global macroeconomic drivers of gold’s performance in contrast to specific local dynamics,”

 

Speaking of global market dynamics, who better to ask than Jim Rogers himself. Jim joined me earlier today to discuss the US economy and why he's buying silver right now. We also discussed the drive by countries such as China to stock up on gold, and what that tells us about the state of things to come. 

 

---

[Bratnia]

The 1970's IMF bailout - wasn't actually called upon. There was a risk/chance that the UK might not have been able to pay its bills (Gilt interest payments) and the IMF had capital for the UK available just in case, but actual bankruptcy (unable to otherwise pay the bills) didn't occur.

Debt expansion = inflationary = benefits the legal 'counterfeiter' who gets to print and spend those new/additional notes at the expense of devaluing all other notes in circulation. A form of micro taxation pushed to extremes. Debasement of the currency. In effect is just another tax. When the US prints/spends more so others have to also do the same, otherwise the US exports inflation to its own benefit, cost to others. If China buys a US treasury bond that pays 5% interest but the US debases the US dollar so China would lose out, so it prints more to buy more US treasury bonds to offset that otherwise loss. So large scale debt expansion everywhere is just increased taxation (collective currency debasement/inflation). Easily mitigated, don't lend to those that don't need to borrow as they have a money printing press (avoid cash, cash deposits, treasury bonds/gilts), hold stocks and gold/silver instead as 'currencies' and only convert (sell) some of those as and when your credit card bill falls due. Those 'currencies' are inclined to see increased purchase power over time.

Conceptually the state could end selling treasury's/gilts (borrowing), and not bother collecting taxes, could all be sourced via currency debasement, the state just printing/spending however much it needs to. But within limits i.e. excessive/wasteful print/spending would tend to lead to others dumping the currency in favour of others. Has to be responsible or otherwise risk potential hyperinflation. You can't end all debt however as the cash/notes in your wallet are debts, zero coupon instant redeemable 'bonds' (notes). Without debt there's no money and you'd have to barter instead.

The primary concern is not the size of debt but the balance of payments, deficit (more money flowing out than in). As per any household if more goes out than what comes in and sooner or later that leads to significant problems.