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Statistics on inflation have been greatly distorted. And one explanation for the rise in the price of gold is not that gold is rising, but that paper money is massively losing its purchasing power . But is it possible that the decrease in purchasing power is as great as the fall against gold indicates?
Yes. According to some statistics, the price of gold is around $4,000, more or less where it should be. But the current geopolitical conditions in the world, with China emerging from nowhere in 1970, economically speaking, at that time 2% of the world's industrial raw materials were consumed by China.
Now it's more like 50% or more. Yes, it's incredible. Incredible. That's the word. The relentless rise in the price of gold is attracting renewed attention from investors who are questioning the true value of paper money. As economic uncertainty increases and the dynamics of global power continue to shift, precious metals are once again becoming a major topic of discussion.
Mark Faber, a veteran investor and market commentator known for his long-term perspective on global markets , emphasizes that the rise in gold should not be viewed simply as an increase in the value of gold. He argues that the most important story is the constant loss of purchasing power of paper money.
From his point of view, official inflation statistics often fail to capture the real erosion that occurs in economies. He points out that gold trading near $4,000 may actually reflect where it should be based on broader monetary realities. Faber also highlights the dramatic transformation of China, which decades ago was a minor economic participant into a dominant consumer of global raw materials.
This change, combined with geopolitical shifts and rising debt levels, continues to reshape financial markets. Looking ahead, it suggests that precious metals could continue to be supported as investors seek protection against currency devaluation and economic uncertainty. If current trends persist, gold could continue to reach higher prices in the long term.
. The story of my involvement in gold and silver essentially begins in 1970, when gold was still at $35 an ounce. Oh. And then the US and Nixon abandoned the gold standard on August 15, 1971. And then we had the first major gold and silver bull market , which lasted until 1980, and after 1980, we had a correction phase that lasted down to $99,200.
And then another bull market began until September 21, I believe, of 2011. And then, in 1921, the price of gold fell back down to around $ 1,000. And then the current bull market began at over $4,000. And, of course, people ask, " Why is gold going up?" Some observers , of course, never believed the inflation figures published by the government.
And by the way, as a philosophical or political philosophical observation, I would say that a responsible and moderately intelligent person will never believe a word that government officials say because 90% of what they say is a lie. Yes. But anyway, the inflation statistics have been hugely distorted.
And one explanation for the increase in the price of gold is not that gold is rising, but that paper money is massively losing its purchasing power . However, is it possible that the decrease in purchasing power is as great as the decrease against gold indicates? Yes. According to some statistics, the price of gold at around $4,000 is more or less where it should be.
But I can give examples, and we have to acknowledge that. To demonstrate that inflation exists in some assets and at some prices, but does not exist in other prices. Let's just say my grandparents bought one of the first televisions in Switzerland in 1954. I remember it because I was 8 years old at the time and the World Cup was being held in Switzerland.
Yes. And the final was between Hungary and Germany and it rained the whole time. So the television never worked. Everyone was very angry, and it was in black and white, and all you could see was rain falling, and you couldn't see any football players, especially Pushka, a great football player from Hungary.
Anyway, I remember it very well. And this television cost $2,000. Oh. I recently went to buy a television for my employees and it cost ... I mean, with $2000 I could have bought 10 televisions. Yes that's how it is. And then I bought my refrigerator because I was opening the door all the time to get the beer out and the door broke .
So I had to buy a new refrigerator. I was surprised at how cheap a decent refrigerator could be that works very well and uses less energy than the old one. There are so many things that have become incredibly cheap. In part, and this is something I have to say to the American audience, instead of condemning China all the time and badmouthing the Chinese, you get your appliances much cheaper because of Chinese production that came online and they produce millions of televisions, right?
And computers and everything. And so the prices of consumer electronics and household appliances have fallen. But the cost of insurance and the cost of education for their children have skyrocketed, right? And where the government has a strong stake, the prices are incredible. You know, in schools and hospitals.
The best financial advice I can give people is not to get sick and have to go to a hospital that will bankrupt them. Silver is more of an industrial product and apparently a lot of silver is needed for all these data centers, etc., and that is possible, and they say or the theory is that every year, as in the 1970s, the mining supply of silver is less than the mining demand for silver.
Then prices go up. This is also the case with rare earth metals that became ballistic. Mhm. And my theory is that platinum will rise and surpass the price of gold, which would mean a huge increase, going from about $2,000 to over $4,000, but in general people still don't believe it, but I think it's going to happen.
Which would represent a big change, from about $2,000 to more than $4,000, although people don't believe it yet, but I think it's going to happen. This is my opinion, because if we look at the movements of raw materials this year, the price of nickel has already risen by 10%, I'm referring to the big movements, and some believe that copper will rise substantially.
When I studied that, I was very interested in economic cycles, business cycles, etc., and I studied the Kusnet, Jukler, Benner and Contraf cycles, as well as long-term cycles, short-term cycles and very long- term cycles, and later I became interested in war cycles. Because as societies go through different stages, their propensity to go to war increases or decreases.
TRUE? Let's say a generation that grew up during World War II and saw the atrocities is less likely to want to go to war than their children, who may have heard about the atrocities through reliable sources or movies, etc. But people who have experienced war generally don't want to go to another war, except for generals and people like Patton and others, who are fanatics; a brilliant man, but a military man.
The current conditions in the world geopolitically speaking, with China having emerged from nowhere in 1970, economically speaking, at that time 2% of the world's industrial commodities were consumed by China. Now it's more like 50% or more. Yes, it's incredible. Incredible. That's the word. And its industrial production is enormous.
You know, I mean, they produce more cement than the rest of the world combined. Anyway, what I mean is that this location means that the US, which was far ahead of everything else in the world after World War II, now has competitors, and that creates enormous tensions. I mean, let me give you an example: in 1870 the British Empire was still dominant, including the pound sterling as the world currency.
Yes. But then, based on the brand, German industry grew very rapidly, and by 1910 the German economy had overtaken that of Great Britain. Oh. And that, of course, greatly disturbed Great Britain. There was another world power competing with them. And so came World War I. The most pointless war in history, but fought with great enthusiasm by the generals, not by the soldiers who were in the trenches and came out of them and couldn't walk 5 meters before being shot at from the other side.
The debate centers on how inflation affects different parts of the economy in very different ways. While many everyday consumer products have become cheaper due to technological advances and large- scale manufacturing, other expenses have increased dramatically over time. Consumer electronics, household appliances, and similar products now offer higher quality at lower prices than decades ago.
However, sectors such as healthcare, insurance, and education have experienced significant cost increases. A key argument is that inflation cannot be measured through a single lens because some assets and services experience strong price growth while others remain stable or even decrease. Global manufacturing, particularly in Asia, has helped reduce the cost of many products, but rising service-related expenses continue to put pressure on households.
The overall implication is that official inflation measurements may not fully reflect the financial reality of consumers. Looking ahead, cost pressures on essential services could remain a challenge, even if prices for manufactured goods remain contained. Now, let's get back to the interview. I think the fact that gold has risen relative to paper money is a sign that the bubble is bursting because Trump wants to cut interest rates in a perfect world to 1% by the end of the year.
TRUE? If they start printing money again, the gold and silver market and commodities in general will rise substantially. In other words, inflation will rise and the Federal Reserve controls an interest rate. It's the federal funds rate, that is, short-term interest rates. Yes. But they don't completely control the bond market.
Of course, they have influence on the long-term bond market. But you'll understand if you tell me I 'm a bondholder. In my asset allocation, I have bonds of different maturities, etc., but I like cash flow. Yes. But anyway, if you tell me the Federal Reserve is going to loosen its monetary policy right now, I'm not going to buy a 20-year bond, or even a 10-year one, because I think that would be very inflationary.
So , are you telling me that interest rates will go down? Yes. They could go down if the economy, as I believe, is much weaker than the government reports. I think this is the reality, that the economy is quite weak. But as some people, like John Williams, argue, we could have an inflationary depression.
In other words, wages in real terms are falling. Yes. So most people live paycheck to paycheck, and at the same time, financial assets increase due to money printing, but the currency is under pressure. Now , you say that, contrary to what other central bankers are also doing by printing money, the Europeans and the voice are correct, there is only one currency that can be stable and that is precious metals.
Yes. Yes, absolutely. Well, this is my answer about precious metals. I believe that by not possessing precious metals, people make a mistake. They should, even if they go down, they can go down less than financial assets. Yes. And this is the last thought I want to leave you with because I have to go, I really have to go.
Precious metals and industrial raw materials are emerging as an important topic in the current market environment. Beyond gold, attention is increasingly shifting towards silver, platinum, and other resources that can benefit from growing industrial demand and changing supply conditions. Technological advances, the expansion of data infrastructure, and long-term investment trends are putting pressure on commodity markets .
Silver is considered not only a monetary metal, but also a fundamental industrial resource. The growing demand from technology industries could lead to higher prices if supply fails to keep pace. The prospects for platinum are even more surprising. One notable prediction is that platinum could eventually surpass gold in value, which would represent a substantial move from current levels.
A similar optimism extends to raw materials and rare metals that benefit from structural demand trends. Proponents of this view believe that many investors have yet to recognize the magnitude of the potential shortage developing in resource markets. If industrial consumption continues to expand while production remains limited, several raw materials could experience powerful multi-year advances.
These events may create opportunities for investors seeking exposure to hard assets during a period of economic and monetary transi.
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