Tuesday, August 30, 2016

The World Is Hurtling Toward 
A New Global Monetary System
"A new recession is inevitable. As already mentioned above, precise predictions regarding the when or how are not possible. At this juncture we nevertheless want to warn about an economic scenario that we believe to be a realistic possibility, namely stagflation .. If reflation through higher credit expansion becomes more difficult, central bankers can do nothing but improvise (e.g. by testing the 'academic thought experiment' of helicopter money in practice), which could lead to a loss of confidence in the paper currencies. This could – similarly as happened in the 1970s – manifest itself in a devaluation of paper currencies towards commodities .. The debt burden also makes a return to monetary policy normalcy extremely unlikely, as governments would likely be bankrupted left and right as a result. If a recession were to strike, it would strike with full force, as neither monetary policy nor fiscal policy could be used to mitigate it. Only inflation and economic growth could solve this dilemma, but neither of them can be pushed beyond a pedestrian pace. The Gordian knot needs to be cut – but how?…  Helicopter money could be the central bankers’ ace in the hole, as it would probably indeed boost inflation .. It would also be the time for gold to shine. Should money indeed begin to drop from the skies, the reflation efforts of central banks would in all probability finally succeed and occasionally overshoot their targets – the kind of environment in which gold is traditionally doing well. Gold, which has been accorded great confidence for thousands of years, could furthermore play an important role in a possible monetary order based on reputation money.
- Ronald-Peter Stoeferle, Incrementum AG Liechtenstein
LINK HERE to the article

1 comment:

Anonymous said...

The Night That is Upon Us and the Dawn of a New Era A speech by Hugo Salinas Price at the inaugural ceremony of the Fourth Convention of the Association of Mining Engineers, held in the city of Durango, State of Durango, Mexico, on August 25, 2016.