Jeff Clark, Senior Precious Metals Analyst, GoldSilver
NOV 5, 2018
Exact predictions of when something is going happen in markets (or society) is a fool’s game. But looking at history can give you a glimpse into what is almost certainly coming your way sooner or later.
There are a lot of similarities, but as Mike points out, the foundation of Rome’s demise can be attributed to its abuse of its money. Monetary inflation was one of the factors that led to dictatorial rule in Ancient Rome. Because they didn’t respect their money and continued to devalue the currency, their society went into decline, eventually paying the ultimate price.
It is a true hidden secret of money:
Do we have “quality” money today? Hardly. One of the episode’s guest contributors, Steve Forbes, highlights the key fault with today’s fiat currencies:
Because the dollar does not have a set measure of value, the Fed and politicians have been free to continually dilute it, eroding its purchasing power. Throw in ever-skyrocketing levels of debt and this one-two punch will have consequences, according to Rick Rule of Sprott Resources:
That reckoning will not be pretty, but consider that history shows gold always eventually covers the supply of all excess currency. In other words, the gold price rises so that the value of the Federal’s Reserve’s gold holdings match the value of the amount of excess currency that’s been created. For example, in 1934, the debasement of US currency heated up and the gold price was raised from $20.67 to $35, to account for all the excess currency. The process began again in 1971, when gold rose from $35 to $850 in 1980, again easily accounting for the excess currency.
As Mike says,
Further, author Richard Daughty adds,
And this is the reason why looking to the past can provide useful insights into the future course of events. If you know the specific consequences that followed specific monetary decisions of the past, time and time again, and you see your country making those same mistakes, you can get a sense for what lies ahead.
For us as citizens and investors, the familiar currency debasement path of the US points directly to the wisdom of having meaningful exposure to gold and silver, mankind’s ultimate forms of sound money.
Shot on site in Rome and full of feature-film-quality graphics and animation, join Mike Maloney and friends Steve Forbes, Rick Rule, Ron Paul, Richard Daughty, and others for Hidden Secrets of Money, Episode 9; Fall of Empires: Rome vs. USA, to answer the ultimate question for yourself: