Metals Minute 47: Debt Ceiling and Gold

Metals Minute: Debt Ceiling Gold

Metals Minute 47: Debt Ceiling and Gold

September 29, 2021 329 view(s)

Inflation is the name of the game. As Hirschmann Capital has pointed out that since the year 1800, 52 nations have hit a debt/GDP ratio of 130%. Fifty-one of them have defaulted. The question that remains is will it be by refusing to pay the debts or by inflating the debts away?

Despite Washington's controversy, a refusal to pay is unlikely. Higher debt levels and more currency generation are more likely. Further devaluing dollars via inflation.

In anticipation of an uncertain period of political and economic wrangling during the debt-limit negotiations, paper gold and silver have been forced lower by the massive selling of paper contracts. The sale continues, but not for long. Meanwhile, physical gold and silver are being scooped up by prudent savers worldwide. 

For the week, gold is marked down 2% to $1747, silver down 5% to $21.95, platinum down 6% to $958, and palladium down 7% to $1922. For the year, gold is down 8%, silver is down 9%, platinum is up 8%, and palladium is down 17%. These lower valuations may be the perfect time to invest.