Eurasia Review: Gold's Flashing Warning - The End is Nigh for Fiat
Article by Claudio Grass in Eurasia Review
Gold’s spectacular performance has drawn a lot of attention and invited endless analyses and commentaries. There are many theories out there as to why the yellow metal is surging like never before in modern memory, however most of them are shortsighted, or tend to miss the forest for the trees. The metal’s meteoric rise is not merely sending message about inflation expectations or rate policy. It’s flashing a clear warning sign about the credibility of fiat money itself.
For many decades, financial markets, as well as our entire economic system, operated under the assumption that fiat currencies, backed by nothing but political will and central bank promises, could be managed indefinitely and that the busts and crises created by printing and spending could be easily resolved by more printing and spending.
That childish hope is now finally fading and the signals are everywhere: yields have reversed a forty-year decline, debt has become exponential (and in many cases has already spiraled to irreversible levels), real inflation has reached the point that it can no longer be covered up and “fudged” by the usual cherry-picking and creative calculations we see on official CPI data.
More blatantly, liquidity is retreating from the paper markets that were once .....