Monetary policy destroys assets
It is rare that the inflation has exceeded the two percent mark in recent years. In May, inflation rose by only 1.2 percent. This is a reason for ECB President Draghi to announce further monetary easing at the moment.
Neither zero interest rate policy nor the purchase of bonds took advantage of this. This raises the question for the average citizen whether an inflation rate of zero percent would not be better. But there is the central banks' fear of deflation, when prices fall. This leads to lower demand for goods, lower prices and ultimately deflation.
What's so bad about deflation? The debt will be revalued, i.e. higher. Debts may no longer be repayable. The central banks are therefore taking precautions, at least they are trying. But here globalisation, the participation of low-wage countries, seems to be working against the intentions of the central bank.
Because globalization naturally puts pressure on prices. Another factor is demographic change, which means that our society is getting older and older, and this has consequences. More and more younger people, for example, have to finance the pensions of older people. Concerns about retirement without financial problems are increasing, reducing sales as savings are made.
But saving has become problematic because, as I said, there is no interest or even negative interest. Doing what? Whatever the European Central Bank may be trying to do, it needs to make provision for the future and, with it, a healthy investment based on several feet. Even if many Germans still do not include the investment in shares, there is still an option to hedge in different directions. A well-diversified equity portfolio is part of this, which also includes the possibility of investing part of one's assets in precious metal equities.
Examples include Maple Gold Mines and US Gold. Maple Gold Mines - http://www.commodity-tv.net/c/search_adv/?v=299175, an advanced gold exploration and development company, owns the Douay gold project in the Abitibi Greenstone Belt in Quebec, Canada. This produced up to 21 grams of gold per tonne of rock from drilling.
US Gold - http://www.commodity-tv.net/c/search_adv/?v=298868 - owns various concessions. The company pays particular attention to their Keystone gold project in Nevada and its Copper King project in Wyoming.
Current corporate information and press releases from Maple Gold Mines (https://www.resource-capital.ch/en/companies/maple-gold-mines-ltd/) and US Gold (https://www.resource-capital.ch/en/companies/us-gold-corp/).
In accordance with §34 WpHG I would like to point out that partners, authors and employees may hold shares in the respective companies and that there is therefore a potential conflict of interest. No guarantee for the translation into German. Only the English version of these messages is valid.
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