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Gold - the ace up your sleeve

There is no doubt that there will be challenging times ahead for savers, entrepreneurs and investors in the coming years as we find ourselves in the midst of significant monetary and geopolitical developments, the outcome of which no one can predict.

Through years of low and zero interest rate policies, the leading economies have been flooded with liquidity without even thinking about the consequences of such an expansion of the money supply.

As might be expected, this practice caused a higher rate of inflation. Although this fact was initially played down by the central banks, the now significant rise in prices is part of our everyday life. However, fighting this is an almost impossible tightrope walk for the central banks as they are faced with a dilemma. They could raise interest rates to lower inflation, but this risks triggering a recession. This would reduce investments in companies, lower wages, cut jobs and reduce consumption. The banks therefore have no choice but to increase the key interest rate very slowly and gradually, which means that inflation will be with us for a few more years.

Gold - Das Ass im Ärmel

Another development that you have probably heard about in the media and which will also have a major impact on the world market in the future is the following: “de-dollarization”.

In the course of the Ukraine war, the US once again used the dollar as a financial weapon. $300 billion in Russian currency reserves were frozen by the US and its allies, and Russia was banned from using the SWIFT payment system. This technique has been used many times in the past, such as against countries like Afghanistan, Venezuela and Iran. But this will not remain without consequences, because many countries have been complaining for a long time about the unjustified preferential position of the dollar and want their own trading and financial system, or at least one that is separate from the dollar. The main players in this development are China, followed by Russia and India, but even more countries from Asia, Africa and South America are striving to gain more say and influence in international trade. This development began back in 2000 and is progressing very slowly but steadily. One could compare this process with the continental plate tectonics since these move very slowly but at the same time cannot be stopped. Nobody can predict the outcome of this development either, but one can assume with reasonable certainty that this will shake the global monetary system in one way or another.

No one can predict how this global financial poker game will play out, but one thing is certain: Like the ace up the sleeve, gold is a reinsurance for savers and investors. - Gold not only functions as an investment in uncertain times, but also as a reliable protection against erosion of purchasing power and volatility on the capital markets


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