Gold & Silver against IOUs
Recently we’ve seen a huge shift from paper backed notes to hard currency such as Silver coins or gold coins like Kruggersrands and Golden Eagles.
Interestingly enough , one of the biggest buyers of hard gold has been Germany in the past 1 year , so much so that many dealers just ran out of supply, which further increases demand and drives prices up greatly. This all has a negative impact on the ability of paper currency to cover debt. Currently , no largely traded currencies are covered by gold, CHF was the last currency to do so , but dropped the tie between itself and gold in 2001 (it was last tied 10% to gold).
I’m curious whether or not we’ll see a return to hard currency or not.
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