If you’re holding gold as an investment or a way to protect your capital from inflation, you still need an exit plan. Ultimately, the question of when to sell comes down to whether or not you believe the existing fiat currencies can survive the looming inflation – or perhaps even hyperinflation – that many analysts see on the horizon.
A call-in commentator on Jim Puplava’s Financial Sense Newshour recently asked the host when he should plan to sell his gold.
“It’s going to be when the currencies collapse, and it’s going to be when governments come up with a new currency order,” Puplava says.
“Maybe they’re going to monetize it. They’ll monetize gold. They’ll have to have some kind of gold backing because we know the fiat system is in its end game route right now. All fiat currencies are depreciating. And it may be that they come up with regional currencies.”
Puplava envisions an Asian Block, a European Block and a North American Block of currencies all backed by some sort of tangible asset.
“By the time you have a currency collapse,” he says, “people no longer trust the paper. So, if they’re going to come up with any kind of solution, they’re going to have to come up with a solution that’s going to give the currency … some kind of credibility, and I think it will probably be the re-monetization of gold. At that point, you’re going to have your exit strategy.”
I’m not entirely convinced that the Euro, the Dollar and the Yuan are doomed. It’s almost too difficult to fathom. But it’s clear that we’re in extraordinary times. Countries around the world are in a race to de-value their currencies as they try to lessen their debt burdens. If one of those countries defaults or spirals into hyperinflation, the problem could spread globally, and the implications might be worse than we’d like to admit.
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Tags: currency, fiat currencies, Financial Sense, GOLD, Jim Puplava
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