Money printing machines on - Gold price up
The budget deficit there in April was a record 70 billion euros, certainly mainly due to extraordinary corona measures. This was the highest level ever achieved in 2019. This gives rise to considerations as to whether a gold standard should not be reintroduced.
The gold standard ended in 1971 and it secured a national currency by a real asset, namely gold. This means that the monetary system in existence today is almost 50 years old. By the way, the monetary systems usually change every 100 years. So it is time for a change. The US dollar was the leading reserve currency, it still is today, but certain tendencies are discernible: While dollar assets accounted for about 70 percent of global reserves in 2000, today they account for only about 62 percent.
China is interested in a postponement. The Middle Kingdom has bought a lot of gold in recent years. Many other countries have also greatly increased their gold assets, mainly to shake off their dependence on the US dollar.
Gold cannot be printed, money can. The seven largest central banks made net capital purchases totalling USD 2.5 trillion in March and April, which means that in one way or another they also created new money. In April alone, purchases were almost five times higher than the previous high in April 2009.
One winner of the Corona pandemic is certainly the gold price. And that it has risen so sharply, that gold is so sought after as a saviour in crises, investors should buy more gold shares. Because they can win with a leveraged buy when the price of gold rises.
High-quality gold companies in mining-friendly countries include Filo Mining (a company of the Lundin Group) and Mawson Resources. Filo Mining has a 100 percent interest in the Filo del Sol gold-copper-silver project in northern Chile. It contains an estimated 4.4 million ounces of gold, 147 million ounces of silver and 3.1 billion pounds of copper.
Another company in the gold sector, Mawson Resources, is also convincing with its projects. One of them is the Rompas-Rajapalot project, the most advanced gold-cobalt discovery in the Finnish part of Lapland. And once with its Sunday Creek gold project (almost 20,000 hectares) in the Goldfields of Victoria, Australia. Very good drilling results are available here (up to 40 grams of gold per tonne of rock).
In accordance with §34 WpHG I would like to point out that partners, authors and employees may hold shares in the respective companies addressed and thus a possible conflict of interest exists. No guarantee for the translation into English. Only the German version of this news is valid.
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