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Ralph Malisch of Smart Investor, interviewed CEO of Monetary Metals, Keith Weiner on the economic issues facing the global economies. Keith explained the reason for the disappointing price development in gold as of late, and what would make the price rise again.
” Unfortunately, many have bought gold using leverage and are facing margin calls, capital requirements and bank loan recalls. This creates a demand for paper money, especially for the US dollar. Many people buy gold to get out of the role of creditor in the dollar system. But right now, more people are selling gold to raise the money they need.”
Keith and Ralph also discuss current inflation pressures and what the impact of rising rates will mean on prices.
“A change in the interest rate causes a lot of damage. But if we only look at consumer prices, the Fed is thinking backwards. Lower interest rates mean moderate, if not declining, consumer prices. We saw that from 1981 to 2020. Raising interest rates will bankrupt marginal producers in any market, reducing supply and raising prices.”
To understand what is causing inflation, and why the ECB can’t fix it, you can read the full interview here.
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