We are seeing dangerous developments in Europe

The energy crisis is heating up

After a relaxed summer, people are slowly returning to the real world in Europe. The realization is setting in, that Europe will not only be facing high levels of inflation, but also an energy crisis. The trigger was undoubtedly the war in Ukraine and Europe’s stance to blindly follow the USA in its sanction policy. But the root causes are much older. So far governments continue the policies, which have become standard during Covid, large subsidies and government intervention into the market. This will lead to even more inflation pressures, as helicopter money has become the norm. The US-Dollar wrecking ball is also not helping the situation. So far, people have reacted with mild civil disobedience such as protests and burning energy bills in the street.

Is gold asleep?

All the indicators which are normally pointing toward a strong case for a higher gold price seem to be at play. Yet gold has not performed very well, especially in US-Dollar terms. The main reason for that right now is exactly this strong Dollar, which is getting all the attention. In Euro or Japanese Yen, the situation is quite different. Also, gold has held up quite well, considering, how bad bonds and equities are performing right now. Going forward, it is clear that the world needs a neutral hard medium of exchange. It has especially been developing countries which have been spearheading this development. Russia has introduced the Moscow world standard, and Dubai has introduced a trading standard. We are seeing a lot of interesting developments around the world toward an economic system, in which gold plays a large role. This will certainly be positive for gold going forward.

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