In the fourth quarter of 2012 gold prices have plateaued after a 12% increase in the third quarter (in my opinion, in the anticipation of the Federal Reserve’s slackened monetary policy).
Per usual, gold analysts have varied expectations on the direction of gold prices. However there are a couple of International Monetary Fund analysts who have been writing about legislating away bank created money. That is, returning to the gold standard.
As the owner of jewelry store and precious metals seller Numis International, I believe that would send gold prices skyrocketing. We might not be far from changing money systems completely. Our current crisis may hasten the transformation of money systems.
While it sounds drastic, money systems have changed every 30-50 years over the past couple centuries. Gold was used as money from the Civil War to World War I. From the creation of the Federal Reserve in 1913 to the end of World War II, gold was tied to paper notes, through a fixed rate of exchange between the U.S. and foreign central banks. Since 1971 we have had the same system Nixon established by ending the even exchange from dollars to gold.
Most of us have lived our lives with the dollar, but for generations before us, people didn’t. The same goes for other currencies in various countries. “At some point, we may wake up and find out the system won’t work anymore,” Notowitz says.
I am expecting our money system to fail by 2020, in a dramatic fashion. Paper money will become worthless, but gold and silver will shoot up.
I have a lot of confidence in silver and gold. People are losing confidence in the currency and they want something with intrinsic value. Gold and silver are that medium that people will use to purchase in any future economic disruption.
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