In a piece posted on gold-eagle.com, David Chapman, director of Bullion Management Group Inc., gives a succinct overview of the problems in the Middle East as the revolutionary movements threaten the stability of the world’s major oil producers. He sees the developments being dangers to the dollar, including the possibility of US debt being downgrade by credit agencies.
Chapman further sees the potential for hyperinflation, something that is not discussed in Main Stream Media outlets despite the massive creation of dollars by the Fed.
He notes,”The US is the world’s most indebted nation and is trying to bail itself out by printing money, thus monetizing the debt. The world knows it and many are concerned because of their large holdings of US securities.” Is there any wonder that gold and silver prices are at such levels? Investors around the world are dumping dollars, and many of those dollars are going into the metals.
When investors, sovereign funds and world central banks are sitting on more dollars than they can possibly convert to gold or silver, does it really matter to them what price they pay for gold and silver? That is wild card in this market that makes it so difficult to predict price movements.
Read Chapman’s The End of the US Dollar. He also details the periods when the world has flipped between gold-based currencies and fiat currencies. It’s an excellent read for gold and silver investors.