On the heels of continued wild trading in global markets, there is no question a worldwide tectonic shift is underway.
April 22 (King World News) – James Turk: “As the old saying goes, Eric: ‘Economists eventually do the right thing, but only after trying everything else first.’ The same thing can be said of politicians.
For over a century, economists and their Keynesian friends in government have been trying different things regarding money and banking, largely ignoring the tried and true. There are two observations from this.
The first is that we’ve been guinea pigs in a grim experiment since the Federal Reserve was created 112 years ago. Second, circumstances eventually go full circle by returning to what works, and as far as money is concerned, what works of course is gold.
That’s what gold is telling us as it has surged as high as $3450, and the 45% appreciation in its purchasing power over the past 12 months.
A Tectonic Shift Is Underway
Maybe economists and politicians recognise the fundamental tectonic shift underway. If they don’t, they are fighting not only the tides of history by breaking the formal link between national currencies and gold, but also fighting nature itself by forcing the circulation of money-substitutes instead of natural money, which of course is gold.
Even communists understand that basic principle. Karl Marx famously said: “Money is by nature gold and silver,” though communists, Keynesians, fascists, and other authoritarians today ignore his insight into the nature of money.
Some may take my comments to be a rant, but if so, they should instead be viewed as a wake-up call to all those who believe gold to be a pet-rock. The markets are signalling a fundamental change in the international monetary system is underway.
Gold is in the process of returning to its traditional and rightful role at the center of global finance and commerce, which is where it has been for 5,000 years. So the last 112 years is an aberration and a mere eye-blink of time in gold’s history as money.
This outcome means the purchasing power of money-substitutes – i.e., national currencies – is going to be eroded from inflation and other types of harmful debasement in the weeks and months ahead, which is the message of this log scale chart.
Gold Price Hits $3,450 Before Retreating
For the last 25 years, purchasing power has been moving from the holders of dollars and other national currencies to the holders of gold. Expect that trend to continue as more people see gold as the inevitable solution to today’s monetary problems.
Also, don’t overlook silver. Silver hasn’t lost its usefulness as money.
Silver’s Consolidation Should Result In A Major Upside Explosion
This 5-year weekly chart remains very bullish. Silver has been underperforming gold, which has risen faster. But that could change in a heartbeat as inflation and other financial problems increasingly cause people to choose physical precious metals for the safety of their purchasing power.
Shocking Events Unfolding In China’s Gold Market
Last week was simply a pre-Easter pause in dollar selling by foreigners after the shock of the previous week. It’s hard to think otherwise than that the slide in the dollar and the systemic squeeze on gold is set to continue and that it is just an early warning for what is yet to come…to listen to Alasdair Macleod discuss shocking events unfolding in China’s gold market CLICK HERE OR ON THE IMAGE BELOW.
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