Helicopter Money Will Send Gold Soaring…

Fiat justitia ruat caelum – Let justice be done though the heavens fall

…and the current gold/silver ratio indicates silver will soar even more.

Central Banks and sovereign Governments have been given a free pass to print money and bail out the banking, hedge fund and corporate interests from catastrophically hopeless loan, bond, subprime asset and derivative positions. The coronavirus crisis will be fingered as the culprit but market forces would have forced a financial collapse eventually anyway (see 2008 for the playbook). While the helicopter money will bail out the real perpetrators, it will also effect insidious currency devaluation aka inflation.

Chris Powell at GATA posted a must-read essay on the systemic effect of the impending acceleration of Central Bank printing presses:

“The success of a system of infinite money requires infinite commodity price suppression to defend government currencies. Gold price suppression has been Central Bank policy since the London Gold Pool of the 1960s.  But not only are government currencies becoming harder to defend amid the dislocations caused by the virus epidemic, governments no longer may want to defend their currencies so much.  They want to reflate asset valuations. But even before the virus epidemic, equities and bonds already were highly overvalued by traditional measures, and how can they be worth as much as they were now that world production is declining? Only devaluation of currencies can accomplish reflation.”

You can read the entire essay here: “As infinite money chases collapsing production, gold is on call

10 thoughts on “Helicopter Money Will Send Gold Soaring…

  1. Dick Cheney once said “deficits do not matter”. I never could understand
    how the U.S. could just keep printing money without accountability.
    When the Iraq war was going full tilt I remember watching 60 Minutes
    doing a interview with some U.S. service men in the Desert. These guys
    were using shrink wrapped bundles of $100 bills as footballs. They were
    guarding all these bundles and required to give the bundles to contractors
    and key military personal. The money was not being accounted for. There
    was no ledger just present your ID and sign. The point is that with
    everything that has gone on in the last 12 years I ‘am more convinced
    then ever that this will not end. If a reset does occur it will be digital in
    order to tightly monitor the populace and insure that tax collection is
    complied with. You see based on what has occurred to date and what
    continues to occur today, deficits don’t matter.

    1. Agree but deficits don’t matter until they do. The money printing required to
      fund the coming avalanche of new Treasury issuance AND keep the banks from
      collapse will be staggering. The dollar will get hammered vs gold

    2. If deficits do not matter, then very soon accounting will not matter. Instead, the power of the gun will matter. Money value during the French revolution was enforced by the guillotine. I agree, if there is a reset, it will be digital and not gold backed currency. Digital is as good as gold because it allows for 100% control of the circulation of the money. Digital will make bank runs impossible because money may not be withdrawn from the banking system anymore.

    3. I believe it was Ronald Reagan and not Dick Cheney who coined the expression “deficits do not matter”.

    4. I believe we are at a cross road between fiat or digital currency, unipolar or multipolar world and service or manufacturing economy within the U.S.

      If China submitted to the Deep State and gave up its amibition on the Central Bank Digital Currency, which they were going to roll out at the end of this year, then a vaccine will pop out from nowhere and businesses will reopen in no time. Dollar will remain the Reserve Currency and the service economy in the U.S. will live on.

      If China pushed forward with the CBDC and the rest of the world follow, the virus will persist until most service industry businesses go bankrupt and the bartenders and waiters will be forced to find new jobs in the manufacturing sector – the matter of national security, to make things here rather than China, will be used as an excuse. The CV is a perfect cover to confuse the masses, to enable a fast transition and to avoid taking blame.

  2. The problems I see with digital are 1) losing it or having it stolen too easily, and especially 2) the inordinate amount of electricity needed!

    1. I concur digital BitCoin will not take over the fiat system. What I meant is Central Bank Digital Currency vs. fiat dollar as the global reserve currency.
      I suspect the CBDC will be very similar to euro with the exception that nations will be allowed to print their own fiat currencies for use within their local economy. Basically, it will be a two tier monetary system. Digital, similar to but not real time block chained, CBDC will be used for international settlement and fiat currencies will be used for local transaction.

  3. How do you folks see ETFs like GDXJ holding up during another stock downturn given they don’t bear raid gold again? It got beat up today even though the overall market was up strong and gold was up. Someone made the comment the miners can’t mine so it went down.

    1. I will sell the miners before they get nationalized. I think it may happen somewhere around the range of $3,000- $5,000.

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