Commodity Trade Mantra

Posts Tagged ‘Credit Bubbles’

Can Gold Save The World From the Credit Bubble?

Governments & central banks created the currency & credit bubbles. When fiat currencies crash in the next crisis, backing currencies with gold could “save the world” & restore confidence in fiat currencies but only after significant trauma. Perhaps central banks will do the “right thing,” but only after exhausting all other alternatives.

Gold Prices Boom Coming Due To Worldwide Inflation

Deflation is a central banker’s worst nightmare. Bankers desperately need inflation to avoid deflation. The banks can only inflate their way out of their crushing debt loads. And higher inflation means higher interest rates, both of which are very positive for the gold markets. People buy gold as a safe haven against inflation.

"Buying Time" Doesn't Fix Financial Crises, It Makes the Next One Worse

The strategy of “buying time so the financial system can heal itself” by protecting a systemically destabilizing financial sector has failed because it could only fail. The policies that “saved the financial system” only saved it from the healing process of the market discovering the price of capital, credit, assets, collateral and risk.

There Is Always A Credit Boom Before Each Bust

You may find it striking that each downturn has been preceded by the same thing: A surge in the growth of money. In other words, the bust or a sharp downturn always followed an unsustainable credit-induced boom – No matter what those in charge thought they were doing.

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