Mark Valek guest on Silver Bullion TV
Unprecedented times
We are indeed living in unprecedented times. The year 2020 is full of surprises and we are only about halfway through it. Even though the big thing was of course the Covid-19 virus, the prognosis for 2020 was not too good even without the virus. Still, as Mark Valek notes, it feels like the world is spinning faster and faster.
Why the bubble has not burst yet.
Although the virus hit the global economy hard, it remained relatively unscathed. For the first time we are seeing record highs in equities during a period of very reduced productivity. Only the incredibly large monetary and fiscal stimulus packages were able to re-inflate the bubble to its all-time highs in a very short time. The world’s central banks were much better and faster at countering deflationary pressures. The big question will be what happens if this changes.
The Artificial Boom
The 20th century saw the slow transformation to pure fiat money. First in 1913, then in 1933 and finally in 1971 to get rid of the last remnants. The problem, however, is that our current currencies do not have a firm foundation, but are based more on debt than on a solid foundation. If you look at the crisis of the 1930s, you may forget that already in the 1920s the money supply expanded dramatically. At the end of the cycle, the amount shrank again. Everyone is aware that this is not a good time. In order not to feel the pain of this step, Keynesians try to artificially re-inflate the bubble. Thus, instead of solving the problem of money and credit expansion, the patient is kept alive only with drugs until the next crisis appears.
Gold-Backed Tokens
The Internet and telecommunications as a whole, opened up completely new possibilities and could be a good basis for a new monetary system. Blockchain technology also allows more people to access gold more quickly. However, there is a certain risk here as well, because you cannot own the block chain like physical gold. A certain risk will therefore always be present. Instead of replacing gold completely, Mark Valek sees a complementary coexistence.
Discussed in this interview:
01:47 Living in unprecedented times
05:27 In Gold We Trust report: The Dawning of a Golden Decade
10:34 Why hasn’t the Everything Bubble popped given the Covid-19 crisis?
20:44 Central banks in a trap to perpetually print money
31:36 Real economy down, stock markets at record highs
33:57 Does gold have limitations that may need the help of money printing?
39:12 The advent of gold-backed tokens and the role they will play in the future
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