from Gold Silver Worlds:
Today’s market situation shows similarities with the reflationary periods of 1897 to 1914 and 1933 to 1939. As we all know, they ended in inflation and war. We are currently in a highly deflationary environment, and the banks are fighting this by pumping up trillions of liquidity in the system, hoping for a sustainable recover. At the same time, however, strongly opposing forces are at play destabilizing the whole globe (think of the Middle East, Africa, Ukraine).
Given this evolution, and given that history rhymes, what can we expect going forward? Claudio Grass, managing director of Global Gold in Switzerland, sound money and monetary history specialist, discusses his view on the ongoing trend based on history with Casey Research (source).
After 2008, the central banks tried to counter deflation by printing huge amounts of money. But the velocity of money, which is the credit in the system, is 30% down compared to 2008. It means that all the newly created “money” has not gone in the real economy. Most of the money has gone in the stock market, real estate market and government bonds. This could go on for a while.
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