In his 2012 book “The Rogue Competition”, the economist Hans-Hermann Hoppe, who held a chair in economics at the University of Nevada, analyzed the political competition. He has come to a clear and convincing result: On the way to power there is a systematic negative selection; only the biggest crooks make it to the top.
“The Rogue Competition”
The same principle seems to apply to central bankers. I don’t have to go into more detail about ex-ECB chief Draghi and his successor, the lawyer Lagarde. If you have followed the machinations of the ECB in the past few years, you will know anyway.
Fed chief Jerome Powell allegedly doesn’t know what he’s doing
Instead, I want to draw your attention to Fed President Powell’s recent appearance. He said at a recent press conference, “We are not concentrating at all on moving asset prices in a particular direction.” David Rosenberg, former chief economist at Merrill Lynch, commented on this absurdly false claim by saying, “Oh my goodness! Is this an appearance by Pinocchio? “
If only it were Pinocchio! In our book “The Wealth Destroyers” published in November 2019 Roland Leuschel and I have clearly analyzed the effects of the dubious monetary policy of the past years. Our results are also clear: First, central bankers are redistributing wealth from bottom to top on a large scale. Second, you destroy wealth. Third, they torpedo the market economy and thus democracy.
Finance minister Scholz says that he will pay off debts
In Germany, too, the situation is no different: on Thursday, July 2, 2020, the Bundestag passed the second supplementary budget to finance its huge economic stimulus package. This brings the federal government’s planned new debt to around 218 billion euros this year. The debt brake in the Basic Law, which I always referred to as a paper tiger, had already been abolished at the end of March this year.
The easiest way to identify the dimension of new debt is in comparison to the financial crisis of 2008/09. The record level of debt at that time was 44 billion euros – in 2010. Be prepared even now that the debt orgy, at 218 billion euros, is far from over.
Or believe the fairy tale hour by Federal Minister of Finance and Vice Chancellor Olaf Scholz. He now predicted that debt repayments would begin in 2023 and that most of the new loans would be paid off within 20 years.
Gold is more important today than ever
The fact is: All major monetary devaluations were accompanied by high and rapidly increasing government debt, which was financed by the central bank. So exactly what we are experiencing not only in Germany, but worldwide.
In the past, gold was the best way to protect yourself from the inflationary destruction of your wealth. Due to the long-dubious monetary and sovereign debt policy, I have been recommending a gold share of 25% to 35% in my crisis-proof investing letter since November 2013. At that time, gold was trading at € 975 an ounce. It is currently € 1,580. The 1,800 mark is already in sight.
Gold price per ounce in euros, 2000 to 2020
What is hardly reported: In the past 20 years, the gold price has risen much more than the S&P 500 or the DAX.
Protection and accumulation of assets
Asset protection is only one side of the coin. The other is called wealth building. And the best way to do this in times of monetary policy madness is with gold mining stocks.
In my issue of Crisis Safe Investing, which appeared on June 29, focusing on “Precious Metal Shares Part II – The Precious Metals Bulletin is Intact” I will discuss the Gold Miners Index in detail and show you which of the 10 most interesting gold mining stocks now belong in your portfolio. Despite new record prices, the precious metals sector continues to offer you exceptionally attractive opportunities that you should not miss. Test my stock exchange crisis-proof investment now for 30 days free of charge.
I wish you a nice weekend,
Claus Vogt, editor-in-chief, crisis-proof investing
P.S .: The overvaluation of the US stock markets has reached record levels. Be prepared for a few things: Greetings from the 1930s. More on this in the July issue of Krisensicher Investieren.
P.P.S .: If you want to get through this crisis safely every week, please request the free Claus Vogt market comment here today quite simply with your email.
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