Gold is the only way out for central banks.
CBs want inflation? They need a higher gold price.
CBs want to repair their balance sheets? They need a higher gold price.
CBs want to reset the system with an immutable, neutral, and evenly distributed reserve asset? That’s gold.
— Jan Nieuwenhuijs (@JanGold_) October 9, 2020
- Gold Is the Only Way Out for Central Banks
by Jan Nieuwenhuijs, https://thegoldobserver.substack.com/
Many years of loose and unconventional monetary policy have severely damaged financial markets and the global economy. Currently, central banks find themselves cornered, as the financial system is drowning in debt and addicted to ever easier money. Gold, however, provides multiple solutions.
The other day I sent out a thought-provoking tweet, which addressed how gold can solve three problems central banks are currently facing:
* Lacking inflation
* Bad debt on their balance sheets
* Financial instability
The tweet was born out of several ideas I had for articles to write. One, on the relationship between the gold price, inflation expectations, and the inflation needed to lower the debt burden. Two, on the accounting structure of central banks’ balance sheets, and the ability of using gains in the price of gold to absorb losses on other assets. Three, on restoring financial stability through a new equitable monetary system that incorporates gold. In aggregate, I think gold will be used to get out of the current financial mess.