QUESTION: Hi Marty!
Thanks for all your great work, I’ve been following you for many years and you are a true inspiration.
I have some questions about the precious metals market. There has been some talk about a “monetary reset” in the future, how do you see it play out and what role do you think precious metals could have if there is a reset?
In the short term, we see silver and gold making a pullback now. Will the trend continue upwards or is this the start a downtrend?
ANSWER: There will NEVER be such a reset that returns to a gold standard. There is absolutely no likelihood of that happening, for it would mean that socialism has come to an end. There could be no unfunded promises, pensions, etc. It is just total nonsense.
Moreover, absolutely EVERY attempt to fix or peg currencies throughout the centuries has FAILED!!!! In reality, these attempts have been an attempt to smooth out or eliminate the business cycle. Even Karl Marx wanted to eliminate the business cycle and thought confiscating everyone’s assets would kill it. Communism failed, for the business cycle CANNOT be defeated even at gunpoint.
I have warned that the immediate rally in the precious metals was NOT a breakout. I warned that there would still be one more decline to retest support. The critical factor is when the GENERAL public loses confidence in the government. That is more likely to take place AFTER the turn in the business cycle in January 2020.
Bretton Woods and the gold standard failed because they tried to fix or peg the dollar to $35 an ounce of gold, but then they spent freely and waged the Korean and Vietnam wars. This is what I mean. You cannot create any fixed exchange rate or peg and then expect the economy to relinquish its cyclical nature. It has NEVER happened, and it will NEVER happen in the future.