Will Inflation Drive Gold Prices Higher?

Those who do not learn from history are destined to repeat it. Long ago, I heard that famous saying and it definitely applies to inflation and the price of Gold. Hardly anyone on Wall Street even considers inflation a problem right now, because the world is much closer to depression than to inflation. However, that will soon change.

Governments around the world are doing their level best to create a perfect storm of inflation in order to stop a depression and in a few years when all their money printing comes to an end, the price of Gold could and probably will be at record levels. Gold has always been the best hedge against inflation and when most world currencies drop in value because of over printing of money, there will be a new Gold rush that will leave all others in the dust.

I don't think any world government has learned anything positive from history when it comes to creating a strong economy. Governments around the world have their unlimited free credit cards charging full speed ahead, instead of trying to fix a problem they themselves created. All of that deficit spending is creating a future price of Gold that will dwarf anything we have seen so far.

When all the dust settles and there are no rich people and/or governments left to keep buying the bonds of the U.S.A. and other currencies, the price of Gold will sore to a level of $5000-$10000 per ounce. This will happen at the exact time when the U.S. Federal Reserve and others around the world start increasing interest rates, because of inflation.

The United States has put itself into a box of failure over the long run, because when interest rates start going back up - there will be no way for the U.S.A. or any other country to pay the interest on the debt. That is when the price of Gold will sore to levels not even thought possible today.

I'm not sure when the price of Gold will increase to levels of $5000 or more, but it is a safe bet that is will. When all the money games in the US and around the world finally come to an end, it will be Gold that will emerge as the only single world currency most people will trust. At that point in time, paper money will become worthless and people around the world will start over with a new monetary system based on Gold once again.

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