The global financial system is floating on a sea of worthless paper assets. Unfortunately, the majority of people still haven’t figured out that the end of this fiat monetary system is close at hand.
While the Fed’s QE machine continues to pump out $Billions of Dollars of worthless currency, the fundamental valuations of gold and silver continue to grow hidden from plain sight. As the world’s electronic trading systems move $trillions in and out of Treasuries, Bonds, Equities and Derivatives on a daily basis, a fraction of this amount is moved into physical gold never to return.
Of course Main Stream Media has no clue that the fraction of this currency being exchanged for gold will turn out to be one of the best investments in the future. You almost can’t blame their ignorance as the present paper valuations of gold and silver have not kept in pace with the world’s printing presses.
If we look at the charts below, we can see how the price of gold and silver have reacted to increase of Fed assets:
Before QE2, in Sept of 2010, the average price of gold was $1,342. Within one year and after $600 billion worth of Fed purchases, the average price of gold hit a record $1,772 an ounce in Sept 2011. However, after the Fed announcement of QE3 in Sept 2012 the price of gold declined from $1,626 to an average of $1,350 presently. What a difference from one QE program to another.
The same trend has taken place in silver:
Here we can see that silver increased from $23.40 in Sept 2010 to average $41.96 in April of 2011 during the Fed’s QE2 policy program. Again, the same reverse trend that took place with gold during QE3 also occurred with silver. When the Fed started QE 3, the average price of silver in Sept 2012 was $33.61. But, a year later after the Fed increased its balance sheet $750 billion, the price of silver ($22.66) is now lower than it was before the Fed began its QE2 program.
Furthermore, this divergence can be seen in the next chart which shows the price of gold compared to combined balance sheets of the FED, BOJ, ECB & BOE:
The price of gold has been rising along with the huge increase of these central bank balance sheets until the end of 2012. If you look at the top right-hand area of the chart, the price of gold is now at the same level when the combined assets of these central banks was nearly $2 trillion lower.
Something doesn’t make sense here, but what does today? The financial networks today are more for entertainment and amusement purposes, rather than a medium to provide prudent economic and financial reporting.
The world is heading towards a financial and economic collapse while very few are prepared for what’s coming. Mike Maloney is one of the few voices out there warning of this great transfer of wealth to come, as paper assets collapse while the value of gold and silver explode.
Maloney’s GoldSilver.com just released Episode 3, FROM DOLLAR CRISIS TO GOLDEN OPPORTUNITY, part of the “Money vs Currency” continuing series.
I highly recommend the video (at link above) for those who have not yet had the opportunity of watching this episode. Mike explains how the Dollar is being increasingly shunned by world governments as they conduct trade in gold or with their own respective currencies.
The rate at which the dollar is being abandoned by international trade portends the end of the US. Dollar as a reserve currency much sooner than later. This is the very reason why the paper price of gold and silver have been manipulated lower since 2013. The threat of much high gold and silver prices is an immediate threat to the Dollar.
It is truly amazing to see the price of silver actually lower than it was before the Fed’s QE 2 program in 2010. Furthermore, the price of gold is also not much better off as it is only a few dollars higher during the same time period.
While the central banks have been able to prop up the fiat monetary system a bit longer, the fundamental valuations of gold and silver are hidden out of view awaiting for the right time to explode Unfortunately, the majority of investors will not be able to take advantage of this great wealth transfer as the revaluation will occur virtually overnight.
The time to exchange fiat currency for real money in gold and silver is running out.