You Feel Poorer Because You Are When Measured in Gold
Dominic Frisby joined Kitco News anchor Jeremy Szafron at the New Orleans Investment Conference to explain why official statistics paint a misleading picture of prosperity.
Measured in dollars the United States appears to keep growing richer. Measured in gold or silver the picture looks far different. Frisby calculated that American output per person has fallen roughly 57 percent since 1975 when denominated in gold. He argued that gold reveals the true erosion of purchasing power that fiat currencies conceal.
“If you use gold it tells the truth but politicians don’t like the truth,” said the author of The Secret History of Gold. Frisby pointed to the same dynamic in Britain where his own mortgage payment has nearly quadrupled and where the government will soon spend as much on debt interest as it does on education. He keeps as little as possible in sterling and warned that money sitting in the bank is no longer truly yours once tax authorities gain the power to pull funds directly from accounts. The era of cheap money is over for both households and governments.
Looking ahead Frisby sees gold consolidating for several more months before clearing five thousand dollars next year in a pattern that resembles the sideways stretch after 2006 that preceded new highs in 2008. By the end of the decade he targets seven thousand to ten thousand dollars. In the near term he prefers oil and believes crude can reach one hundred fifty dollars quite easily. He noted that oil at that level played an often overlooked role in the 2008 financial crisis. When the money printer eventually returns he expects gold mining stocks to outperform Bitcoin. The interview highlights the growing gap between official growth narratives and the lived experience of declining real wealth measured in sound money.
