Gold & Silver Prices To Rise As Global Financial Reset Could Be Soon

Could a global financial reset push gold to $10,000 an ounce?

Tuesday, June 28, 2016

northern rock

Let me start this one by saying that I am not the doomsday theorist. I'm not the guy screaming that the sky is falling. In fact, I like to see things in a positive light. With that said, the world's financial system is facing big problems, and the evidence is everywhere. As a result, I'm expecting that sometime down the road, it could be months, years or even decades away, nonetheless, a global financial reset will need to happen. Many say that it's likely to happen soon. If this is the case, gold and silver will climb in a big way. With that said, today we'll discuss the evidence that a global financial reset is necessary, how it would affect gold and silver, and what we can expect to see in the price of these commodities moving forward.

The Argument That A Global Financial Reset Is Coming

The experts arguing that a global financial reset is coming say that the big issues started when the gold standard was abandoned. In the past, cash money wasn't just a piece of paper. Instead, it was more of an I.O.U. If you ever decided to, you could have brought your cash to the Federal Reserve Bank and exchanged it for its value of gold.

However, that's no longer the case. Several years ago, countries started to sell their stockpiles of gold. Instead, the value of currency became largely focused on the interest rate that was attached to that currency. Essentially, money was changed from something with true intrinsic value to something that had no value other than the trust we place in it.

Since then, we've seen quite a bit by way of big economic problems around the world. Unfortunately, it seems like these problems are only getting worse. The best evidence of this issue is to look at actions made by central banks in the world's largest economies. Because the financial model isn't working, we've seen incredibly bad recessions. To ease the economic strain, central banks have been reducing interest rates, many of them pushing interest into negative territory. In layman's terms, central banks have been increasingly devaluing the currencies they control.

This brings us back around to debt. Due to mass devaluations and economic hardships, the world has far more debt than it will ever be able to pay off. When these debts come to maturity and there is no money able to be paid, well, the debts go into default. Now, what happens when entire countries go into default?

We saw this in Greece. When the country couldn't afford to pay back its debts, banks closed. The only way Greek consumers could access their money was through ATMs. Unfortunately, there were stringent limitations. Only about $60 per day per account was to be dispersed. This led to lines miles long outside of banks and extreme financial pressure on consumers.

Now, what would happen if the larger economies around the world ran into the same problem. Could you imagine if the United States, China, Europe, and the UK all decided to shut down their banking systems? Well, based on what we're seeing around the world, this is a real possibility at some point down the line.

With all of this in mind, experts argue that a global financial reset needs to happen in order to avoid a global economic depression. It's hard to argue against this opinion.

How A Global Financial Reset Would Shape Gold And Silver Prices

gold and silver prices

Gold and silver were some of the first known currencies. On top of that, throughout history, these currencies were the only ones that remained somewhat stable. As a result, if a global financial reset were to happen, chances are that it would include going back to the gold standard. This would mean that money would once again be backed by something of value.

Of course, in order to back the money with gold and silver, entire economies would need to go on a precious metals buying spree. This would ultimately lead to massive increases in demand for both gold and silver. In the end, the prices of precious metals would skyrocket. In fact, I've even heard experts say that if this were to happen, gold could climb to more than $10,000 per ounce.

Is This Far Fetched?

Now that you know the story, the big question remains. Is the idea of a global financial reset a bit far fetched? Would gold and silver really climb in value if it were to happen?

Once again, I don't like to be the doomsday theorist. However, to think that the global economy is in a good condition at the moment would be a mistake. The way we're doing things now simply isn't working. So, at some point, something is going to need to change? Now, is this going to happen next month? Probably not. However, at some point down the road, something will have to change.

Considering that precious metals have been the strongest currencies throughout history, it's hard to argue against the idea that this would be the direction the world's financial system heads to over time. So, it wouldn't be far-fetched to expect big gains in the prices of gold and silver if this did happen either!

[Image Courtesy of Wikipedia]

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Joshua Rodriguez

Joshua Rodriguez is an avid financial professional. He is the owner and founder of CNA Finance, a partner at Modest Money, and a writer for US News & World Report, Investing.com, and more! Joshua takes a strong fundamental approach to market analysis and enjoys offering his take on what we can expect moving forward. You can reach Joshua at cnafinancehelp@gmail.com.