The Phaserl


Reasons Why Gold May Have Gone Higher

from The Daily Bell:

Gold has shown strength in the last couple of weeks – though inflation isn’t the only catalyst. There’s another factor, namely a bizarre new proposal from Bank of England Chief Economist Andy Haldane that’s catching on with Fed governors and frustrated central bankers worldwide. You see, if Haldane gets his way, gold may not just be a store of value – it may be the only one left … Everybody would have bank accounts, and all payments, no matter the size, would be undertaken with debit or credit cards (which could themselves be loaded with value at an ATM). Once everything is electronic, the zero lower bound could be eliminated, and central bankers could set the short-term interest rate at minus 5% if they so desired. No wonder the gold buyers are quietly accumulating. – Wall Street Daily 

Dominant Social Theme: Gold and silver are remnants of a bygone era.

Free-Market Analysis: This article provides us with an interesting speculation on how central bankers intend to get out of the fix of zero-bound rates. Also, why gold has climbed some eight percent since July, even as commodities prices in some cases have lost ground.

It all has to do with the end of cash currency, as we can see from the article excerpt above. The idea is that people are gradually realizing the abolition of cash is not just a fantasy but something that make take place within their lifetimes and maybe even within a decade or sooner.

In fact, it’s not even hypothetical anymore. While Britain may be floating a trial balloon, there are realities advancing in various countries that move beyond such balloons.

Predictably, one such is Uruguay, which prides itself on being a “progressive” country and seems to serve as a kind of laboratory for “modern” trends. Previously, as we know, Uruguay pioneered cannabis legalization. Now it has launched an initiative that is obviously aimed at phasing out cash.

In Uruguay, as of the beginning of October, all employers are on notice they must deposit employee salaries into bank accounts. This very obviously expands digital transactions and reduces the utilization of cash.

The combination of Uruguay’s actions and Haldane’s proposal may have jolted gold prices. Certainly Haldane wouldn’t have spoken out without the approval of Bank of England Governor Mark Carney. Here’s more from the Wall Street Daily article:

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