As a seasoned analyst with decades of market observation under my belt, I find myself increasingly drawn to the allure of precious metals and cryptocurrencies, particularly during these tumultuous economic times. Gold and silver have been the traditional safe havens for investors since time immemorial, their value intrinsically linked to human trust and faith.
Bitcoin (BTC) is currently moving within a narrow, decreasing trend, while gold and silver are reaching record and nearby peak values respectively. It seems that gold and silver are spearheading the market movement, with Bitcoin likely to follow suit shortly.
Gold and silver – the havens of safety throughout history
For centuries, gold and silver have served as reliable safes for people’s wealth. During economic downturns, such as recessions, individuals often secure a significant portion of their assets in these precious metals. This practice ensures that even if the stock market and conventional investments crash, the value of their gold and silver holdings would likely remain stable.
How banks suppressed precious metals
Despite collaboration among central banks, major commercial banks, and Wall Street institutions, they collectively devised a strategy to artificially lower the price of gold and silver through derivative trading. This tactic proved remarkably effective over several decades, leading many investors to trust the government’s narrative that gold was no longer relevant as a store of value, and U.S. treasuries were a more dependable choice instead.
Nevertheless, the insatiable desire for wealth by governments and financial institutions reached unprecedented heights throughout history. This unchecked power to produce vast amounts of currency on demand, primarily for funding wars and other expenses, has resulted in an overwhelming mountain of debt that remains largely unpaid today.
People pay the debt interest and don’t even realise it
In simpler terms, To cover the costs of paying off debts, some argue that governments can print more money, which increases the overall supply in circulation. This increased supply makes each unit of currency worth less, effectively reducing everyone’s buying power. As a result, people end up paying for their government’s debt indirectly.
Most people remain oblivious to this harsh reality that has a bitter taste, but some have come to terms with it. These individuals are now purchasing gold and silver that were once discarded, while interestingly, even the central banks that previously advised against it, are now participating in the market themselves.
Central banks are buying gold again
An investigation into the gold buying of central banks might surprise everyone. Since warning that gold had little value compared with good old U.S. treasuries, central banks have bought more gold in the last two to three years than they have in the past several decades. You might well wonder at this.
Gold continues to make all-time highs
From a crypto investor’s perspective, it appears that the gold price against the U.S. dollar is consistently hitting new record highs. Intriguingly, this price has even surpassed its upward trajectory. With increasing liquidity flooding into the system (essentially, more currency being printed), I anticipate that the cost of gold will continue to escalate further.
Silver – a cheaper alternative
Silver’s historical trend has been to trail gold prices, but it seems poised for significant growth as well. While silver was once primarily used as money, it now serves various industries, including computing, solar power, defense, and more. Despite no longer being a monetary metal, silver remains highly valuable and sought-after. For those who cannot afford gold, silver offers a less expensive yet dynamic investment option, with its price often moving quicker than that of gold.
A cautionary note for precious metals buyers
When investing in gold or silver, keep in mind that although their prices might increase in the future, major banks still hold significant short positions for these metals. This means they retain the power to manipulate prices and cause a sudden drop when demand is high.
Bitcoin is gold and silver on steroids
In uncertain economic times, when recession remains a looming threat, it’s plausible that both gold and silver will maintain their prominence. However, it could be Bitcoin that offers the most significant potential growth in such an unstable financial climate.
Bitcoin boasts the smallest market value among its peers and an exceptionally limited supply. It’s worth noting that due to the recent availability of futures and options contracts for Bitcoin, there could be a potential for manipulation. Nevertheless, considering the vast number of dedicated long-term investors holding Bitcoin, consistent price manipulation by financial institutions is likely to be extremely challenging.
At present, gold and silver are taking the front seat during what is arguably the most devastating era of currency devaluation ever recorded. Yet, it’s worth noting that Bitcoin could eventually outshine both of them. In light of this information, having a diversified portfolio that includes all three might be a prudent approach.
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2024-08-29 17:12