If Gold Is Dead Money, What Does That Make Fiat? by Nathan McDonald, Sprott Money
NIRP (Negative Interest Rate Policy) is an often shocking term, and has been the woe of many in retirement. It is a plague that European policy makers have unleashed on many of their citizens, and it very well could be coming to North America before you know it.
At least, this is how Pierre Lassonde of Franco Nevada sees it. As one of the most respected names in the industry, his warning should not be dismissed, and at the end of the day, why should it be? Is the threat really that unlikely?
In his 2021 year-end letter, Baupost's Seth Klarman looked at the year in review and how COVID-19 swept through every part of our lives. He blamed much of the ills of the pandemic on those who choose not to get vaccinated while also expressing a dislike for the social division COVID-19 has caused. Q4 2021 Read More
Those of us who know how deeply this is connected are aware that the banking elite work in conjunction on many matters. They are responsible for most of the policies that politicians enact and, as many including myself believe, are some of the greatest puppet masters this world has ever seen.
Therefore, if Europe is willing to go down the treacherous path of negative interest rates, then you can bet your bottom dollar that Canada and the United States are already seriously considering this move.
This action is just one of the many reasons why gold is a better investment than ever. In the past, one of the strongest arguments against gold was the fact that it “didn’t pay interest” – essentially, the naysayers claimed if you deployed your savings into precious metals it would become “dead money.”
As many of us in the precious metals industry know, to dismiss gold for this reason is ludicrous. The insurance that gold offers in political and financial turmoil is unquestionable, and has a proven track record of protecting your savings in such times of hardship.
Not only that, but gold has been one of the best performing assets since the start of this century. It can hardly be called “dead money.” Indeed, the reality is quite the opposite.
Now this petty argument can essentially be dismissed, since putting your savings in government bonds or your bank account is not only pointless, but reckless. If you have the unfortunate luck of being in a country that is suffering under negative interest rates, then you know this for a fact.
If you live in a country that is not yet there, then you are still suffering. The pitiful rates that are being offered are not even coming close to keeping up with inflation.
The tables have turned, and as Pierre Lassonde stated in his most recent interview, perhaps the time has come for gold’s renewed bull market to begin – or perhaps it has already started. The future for fiat is grim and bleak, but for gold the outlook is bright. Stack on.