Warnings | The Gold Standard #2210

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Warnings indicate impending danger, problem, or other unpleasant situation. Warnings can be helpful if people pay attention to them. The Gold Standard broadcast’s whole reason for being is to ensure our audience knows about the warning signs and understands the actions they should take to protect whatever wealth they may have accumulated.

Warning signs are all around us today and much less subtle than they were when The Gold Standard first started sounding the alarm. Just as meteorologists can predict the development of storms, Ken Russo, VP of the Midas Gold Group, draw attention to the conditions that threaten the security of your money. The mission is to make sure you know the risks and understand how to lessen your exposure to the dangers ahead.

As Ken warns in this episode, “We’re starting to see things come apart right before our eyes. It’s time for people to wake up. Protect your purchasing power and whatever financial freedoms you have left.”

From the money in your wallet to the cash at your local bank, the Federal Reserve controls all the currency in circulation. The Fed prints money to handle financial emergencies. For the last two decades, interest rates on loans have been at rock bottom. Buying bonds has flooded the markets with emergency cash. The Fed’s strategy has been to use the balance of its bond portfolio (now at an all-time high of over nine trillion dollars) to drive better outcomes like inflating the stock market.

Inflation is out-of-control with no end in sight. The central bank must dial back its bond-buying program to corral inflation and keep it under control. The Federal Reserve will reduce its bond portfolio by two to three trillion dollars over the next few years to stabilize markets, or at least try to. There’s a risk of moving too fast. If the Federal Reserve tightens monetary policy and drops its stimulus programs too quickly, the action could generate the spark needed to set off a recession. Conditions are such that this recession would not be your garden variety recession but the worst recession ever.

Communication happens quickly. Information and communication technologies have connected the world as never before. Some things, like stimulus programs, have a ripple effect that can go on for years. Investors worldwide tend to sell during times of disruption and confusion.

Current market conditions have alarming parallels with the dot-com bubble of the late 1990s. The added stresses and strains of Putin’s invasion of Ukraine have lit a fire under the prices of every major commodity.

Add to this; many countries are desperately seeking something to compete with the US dollar. Will we see the ending of the US dollar as the world’s reserve currency in our lifetime? It’s looking increasingly possible.

The common thread to all the discussions between host Dave Deno and Ken Russo is how to protect against the loss of purchasing power. Never underestimate the highly corrosive effects of inflation. Even when considering the nine percent interest paid on thirty-year treasury bonds in the 1980s, inflation eroded any gains by thirteen percent. The result was that your wealth decreased four percent a year.

The biggest stock market crashes in history were not as deep or long-lasting as the ones expected to occur any time now. The question is will you have time to let the market recuperate? The 2008 crash, the worst economic disaster so far and caused by criminal behavior by the banks, took a minimum of five and a half years to recover. There was another half year before many investors regained their pre-crash purchasing power. Once the everything bubble explodes, there will be long-term damage to stock portfolios. Most retirees won’t have the luxury of time to recover.

Having gold in place will protect your wealth and purchasing power whenever the next crash occurs, no matter how long the stock market takes to bounce back. In fact, the longer it takes to recover, the better gold and silver will perform.

The best defense against a bear market and the corrosive effects of inflation is gold and silver.

One of the oldest and most popular gold bullion coins is the 1 oz gold Krugerrand. The gold Krugerrand, minted by the Republic of South Africa, is the first modern, government-issued gold bullion coin. It features the four-term President of the South African Republic, Paul Kruger, on the obverse. The reverse has Coert Steynberg’s design of a Springbok Antelope.

It’s no wonder South Africa was the first country to produce a gold bullion coin. The government has the largest gold reserves in the world. The South African Krugerrand gold bullion coin first hit the market in 1967; and, for more than 12 years, was the only option for private gold ownership.
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