History Repeating Itself
For thousands of years, from 3rd Century Rome to 18th Century France or the John Law era of 1720, history teaches us lessons.
History specifically confirms that all empires, nations or regimes which find themselves at fatal debt levels eventually resort to the seductive (as well as desperate) call to devaluing their currency in an effort to counterfeit their way out of a debt crisis.
Devaluing Currencies to Pay Debts Ends Badly
Such measures, which begin slowly at first, eventually become addictions, as weaker and weaker currencies are rolled out with increasing speed to mask otherwise unsustainable over-spending policies and unpayable debt burdens.
Initially, such currency devaluation feels almost miraculous, but the end result is always the same: A tragic transition from economic boom to bust follows, along with the destruction of the underlying currency.
Higher Risks Today
The current era is no exception to natural market forces and such lessons of economic history. Despite years of spending and living beyond their means in an era of undeniable market euphoria and risk-asset inflation, governments and central banks around the world have put us at severe risk.
Central banks have promulgated a fantasy that such artificial measures are sustainable. This includes the growing popularity of “unlimited QE” under economic theories like Modern Monetary Theory (MMT) which are wrongly presented as a viable and sustainable policy solution.
Understanding Yesterday, Preparing for Tomorrow
At MAM, however, we and our clientele know better, and invest for the long-term, not temporary “boosts” from a money printer.
Debt cannot be solved with more debt paid for by currencies created out of thin air. The inevitable end-game is always the same: Currencies collapse in value and purchasing power, a fact playing out in real-time today.
This historically dangerous trend has only been made worse by the extreme monetary and fiscal policy responses to the 2020 COVID outbreak.
That is why farsighted and informed investors recognise that direct, secure and unencumbered ownership of gold and silver is so critical to safeguarding their financial future in an era of historical debt and currency distortion.