from Birch Gold Group:
Your News to Know rounds up the most important stories about precious metals and the overall economy. This week, we’ll cover:
- Why is ING afraid of an imminent return to high inflation?
- What Russia’s latest moves mean for gold and silver prices
- The beginning of the end for Indian gold ownership…
- …and the red flags we should watch for, too
TRUTH LIVES on at https://sgtreport.tv/
Return to high inflation imminent (and necessary): ING
ING Economics has given us a very detailed monthly update with a very curious omission. It’s even titled Central bankers left holding the baby. (That’s what the British say when here in the U.S. we’d say “left holding the bag.”)
Now, it might be more accurate to say that central bankers are left holding gold bullion, but more on that later.
What the report is trying to say is this: A crisis of some kind is looming, something on the scale of the 2007-08 Great Financial Crisis. (Imagine for a moment, if a crisis does hit, where will it put the price of gold after five straight years of gains?)
So what’s this crisis? Global economic growth has slowed well past the point of concern, especially in places like the Eurozone that are major industrial hubs. The U.S. and China are right there in terms of economic slump. Worse, though, is the accumulated global debt, which has doubled from $173 trillion in 2008.
As the paper notes:
So, the spotlight’s back on central banks to come to the rescue once again. All the major ones are at important turning points. They’re juggling the twin dilemmas of inflation versus decisive rate cuts. Is the former slain? Will the latter breathe life into the still-snarling dragon?
Indeed, we have outlined throughout the rate hiking cycle how the Federal Reserve found itself in a position where it tightened monetary policy in the middle of an economic slowdown. And it now must return to money-printing for two reasons.
There is practically no doubt that money printing is on the horizon, and probably sooner rather than later. That is the solution for economic situations like these. That is what got us out of the Great Financial Crisis (and coincidentally made gold double in price in that timespan).
You might think that central banks are now “inhibited by debt.” But are they really? If they could work with $24 trillion of debt, why not $48 trillion? Why not $480 trillion, for that matter? Yes, ultimately the currency (and the economy) would collapse – but inflating away the debt is a time-honored practice. After all, the only people who suffer in this situation are the “greedy creditors” who loaned the money in the first place. Oh, and citizens, of course.
Central bankers defend themselves the same way, every single time: “Sure, you think this is bad – you can’t even imagine how much worse it could’ve been if we hadn’t rescued you, so you’re welcome, citizen.”
In this way, the world’s central bankers present themselves as the very definition of “the lesser of two evils.” That still means they’re evil!
The ING analysis mentions oil price as a likely trigger for an economic crisis. With good reason! Rising energy prices are highly inflationary, raising the cost of manufacturing and production and shipping at every level. Analysts at UBS recently forecast gold would hit $2,850 relatively soon due to oil prices. Recall that oil hasn’t been stable for years, not since Russia invaded Ukraine in February 2022. The widening war in the Middle East, along with piracy in the Red Sea, have obviously contributed to both supply disruptions and volatile energy prices worldwide.
ING’s analysis leaves gold out completely, which is curious. We’ve seen protectionist-style gold hoarding from Eurozone nations, including repatriations of central bank gold reserves. The same nations causing the biggest economic concerns.
Are these central banks shielding themselves from an imminent threat? Preparing for a new, historic round of money-printing?
When countries like Iraq are buying so much gold that they compete with Western nations, something is going on. What’s clear is that no nation on Earth seems eager to own U.S. dollars or euros anymore. We’d be smart to consider their concerns.
Russia now adding silver, platinum to its central bank reserves (but why?)
What Russia recently revealed during its standard anti-NATO announcement about currency use is a big story on its own. But there is a lot more going on. Let’s dive in!
Long story short, Russia-led BRICS want to unseat the International Monetary Fund (IMF) and World Bank and create their own centralized monetary authority. One that enables them to bypass the existing global financial system completely, insulating themselves from dollar weaponization and economic coercion from the U.S. and NATO.
Can they pull it off? (And would it mean for gold?)
On paper, the ingredients are there. Virtually every emerging market nation is joining the BRICS alliance. This matters because emerging markets export raw materials like minerals, oil and gas – metals, too, and gold is a major component.
Russia’s Finance Ministry and BRICS officials feel as if the IMF and the World Bank aren’t treating up-and-coming nations fairly. I’m not here to argue the merits of their complaints – I’m sure we’ve all felt ill-used by bankers at some point or another. The difference here is, BRICS are able to say, “Your banks aren’t willing to work with us, so we’re going to make our own.”
