By: Kaylee Merchak
We spoke with New York Times bestselling author and radio personality Charles Goyette about the Ukraine war, the upcoming Fed interest rate hikes, the current state of the economy, and the impact all of it will have on gold.
Question: Gold prices seem to be supported by the Ukraine war. Do you think this upward trend will continue? If so, how much longer will do you see gold rising?
Goyette: “Gold prices are gonna rise, Kaylee, until it’s game over. Game, set, match. I’m kind of glad that you asked me that to open because I actually have a brand new book that is exactly about that issue and it’s called The Last Gold Rush Ever. And by that, I don’t mean you know a gold rush like the 49ers, the prospectors and mules, and prospecting and stuff like that, but I mean, you know we’ve seen in countries all around the world, including in the United States, we’ve seen periods in which people line up around the block to exchange paper dollars, to exchange dollars for gold. We had an incident like that when [Jimmy] Carter was president. We saw one in Germany for a couple of different reasons…just like two years ago. So, at this point, I call it the last gold rush ever because this will be the final rush for gold out of the dollar as presently constituted.
So, what I’m basically saying is the post-war order, the international monetary system that depends upon the U.S. dollar as a reserve currency, all of that is breaking down. It’s in a state of decay and collapse right now and it’s happening before our very eyes. To somebody like me that watches it daily, it looks like it’s happening very fast. I bet to most of your listeners who check in maybe every now and then or kind of look at it, you know, from time to time, it may seem like it’s going very slowly, but we are, the dollar era is ending as we know it, and so, when you ask how long it’s going to last, it’s going to last until it’s basically all over until the dollar in its present constituency is no longer viable in the role that it has been.”
Question: Right now, we’re seeing such historical inflation and debt. Those things coupled with the ongoing Russia-Ukraine conflict and possible upcoming Fed rate hikes make it seem like there’s a greater chance for a dollar collapse. I know there’s been even much debate this week about the dollar standing as a reserve currency as well.
Goyette: “Yeah, it’s coming to an end. It’s been a slow decay. As I say, it’s been ending, but this is the kind of event, this global phenomenon, war breaking out, obviously, U.S. inflation. If somebody says, ‘Charles, the dollar is not really collapsing. I go look on the monetary exchanges, on the foreign exchanges, and so on, and you know, it says, from time to time the dollar is up or the dollar is down, but it’s not collapsing.’ Well, the truth is that just in the last year, in the 12 months that ended in January, the dollar lost 7.5% of its value. So, that’s the official inflation rate, right? Actually, the real inflation rate is probably substantially higher, but that is, that is a collapse in slow motion of the U.S. dollar, and it’s not one that’s liable to be reversed under any possible scenario that we see now. In fact, it’s most likely to accelerate, and so we actually are witnesses. This is a historical event. We’re actually witnesses to the breakdown, the slow-motion collapse of the world’s leading currency. It’s a very frightening time.”
Question: It sure is. Jumping back, Russia is a big player in the world’s oil supply along with industrial and precious metals. How does their role impact us here in the U.S. or even individual investors?
Goyette: “So wars always make people poorer. They make a lot of people dead, obviously, which is to be avoided, but they also make everybody poorer. And the proliferation of sanctions, and so on, you know, when we impose sanctions on Russia, we are saying not only that they can’t sell things to us, but we’re saying that Americans, like American farmers that need fertilizer for American crops, can’t buy that fertilizer from Russia. So, it affects everybody, and it adds to the dynamic of the building stagflation. So, stagflation, as you know, is a combination of an inflationary period, while we have that in spades, the highest inflation in 40 years, and then a stagnant economy, or an economy turning down, and wars are really good at turning the economies down because, as we say, the proliferation of sanctions and so on, the escalation of the price of oil affects everybody, not only in the household but industries and businesses, airlines, for example. Everybody. So, business slows at the same time prices are going up. It’s the worst of two possible worlds, and that too is in development right now, and that is visible to everybody I think today.”
Question: Definitely something investors should be keeping a close eye on, especially the younger generation; those that are just getting into investing. This is definitely something that could impact these investors later on in life, so it’s something they should be keeping a close eye on, right?
Goyette: “Absolutely! In fact, I’m sorry to tell them, but they’re the ones that are going to be most victimized in this process, so they better get current on it because all the bills are being shoved their way. The greatest generation, the social security generation, the boomer generation, is expected to be supported by those people. Well, you know, I don’t have to give you the numbers of the people that are buried in student debt. The people that have moved back in with families, that can’t afford to start families, and so on and so forth. It’s a brutal, brutal thing that’s been dumped on them, and all of this stimulus spending that the government has embarked on over the last couple of years is not free money. The money comes from somewhere. Where does that money come from? Well, guess what, it’s been shoved down the road and the bill will be paid by just the people that we’re talking about, so they need to be very aware that the dollar is going to be corrupted on their watch, and the truth is, they need to start looking out for themselves because the government, you know, it’s supposed to look out for you. It’s supposed to look out for the value of the currency retirement benefits, things like that. Well, they’re not doing it, so people have to learn to look out for themselves and to protect themselves, and in times like these, there is really only one way to do it, and that’s with gold—the enduring money of the ages.”
Question: Americans are also closely watching the Fed’s actions. And there has been much back and forth on how the upcoming interest rate hikes will impact gold. This week, Fed Chairman Jerome Powell said he plans to raise rates despite the possible economic impacts the Russia-Ukraine War could have on our nation’s economy. With that said, if the Fed follows through with its plan, how does the outlook look for gold?
Goyette: “So, if you really see what’s going on behind the curtain, it is so extraordinarily bullish for gold. Look, the Fed, they’ve got two prospects before them. They’ve got to choose. They’ve got to take, you know, this pathway or that pathway. The one is to seriously raise interest rates to squeeze inflation out of the American economy, and that will tank the stock markets and it will tank the economy, and I watched Jerome Powell as well the other day, and they have made their choice, and their choice is that they are not going to do that. They’re not going to tank the economy if they can help it, even though they’re painted into a corner, so this talk of interest rate increases it’s kind of sissy stuff, you know. Like they could raise, they’re talking about now a quarter of a point increase in March. They could raise interest rates. The Fed funds rate is uh practically zero, for all effects of purposes it’s zero, they could raise the Fed funds rate a quarter of a point for the next 30 months and it would still be below the inflation rate. So, this is sissy stuff. They are terrified of doing anything serious to stop inflation, so they’re going to take a bunch of halfway measures, and they’ve telegraphed it, and that’s why you know the stock market, you know, heard Powell, and it jumped a few points. You know, every time he talks, it jumps a little more because he’s constantly assuring them, ‘we’re gonna take care of you.’ Well, all of this money printing, all of this, you know, failure to ring inflation out of the system accrues to the benefit of gold and gold investors.”
Question: For those who may be new to investing in gold or are just thinking about it, why is gold a smart investment?
Goyette: “You know, somebody asked me fairly recently how many paper currencies in the world have failed, and you know, I’m not one to do a lot of unnecessary work that I don’t need to do, so I’m not going to go look up the tens of thousands, so I just answered all of them. All of them. They all eventually fail because they are made up. It’s kind of a flim-flam. We’re gonna create something. We’re gonna print a bunch of pieces of paper and we’re going to say this has value. You take it, you save it, and so on, and it’s a system that fails everywhere. In backwater countries, it fails in ancient countries, in modern times, and industrial countries. It fails over and over and over again.
So, gold is the enduring money of the ages, and secretly, governments like from time to time to pretend that, you know, ‘we don’t like gold, we don’t need gold. Our paper money’s as good as gold, The euro’s as good as gold. The yuan’s as good as gold. Everything’s good as gold.’ Why do they always compare it to gold? You know, because gold is the enduring money of the ages, and it is the only monetary unit, it is literally the only investment that doesn’t depend on somebody else’s promise. It’s not like a bond that you expect somebody’s going to pay you back. It’s not like a stock that you expect, you know, the company’s got to run, the company well, they’ve got to do good things, they got to make smart decisions. It’s not like putting money with Bernie Madoff or something, and you hope he doesn’t abscond with it all in the middle of the night. Gold is not a promise from somebody else. It doesn’t matter what country it’s from. It doesn’t matter whose name is on it, who issues it, so on and so forth. Gold is its own value. It is the only asset that is not somebody else’s liability or dependent on somebody else’s promise, and we’re in an age in which all of these promises have are overextended and are not able to be met. Governments have made promises to people that they cannot meet, that’s why we’re 30 trillion dollars in debt. That’s why old people are wondering, you know, what happens when their Social Security becomes due. So, gold is the only alternative, it is the only safe haven in an inflationary environment like the one that we are heading into headlong.”
Claim your free one-on-one consultation to help you protect your retirement.
The opinions, beliefs, and viewpoints expressed in this article do not necessarily reflect the opinions, beliefs, and viewpoints of Red Rock Secured LLC or the official policies of Red Rock Secured LLC. Red Rock Secured LLC is not a financial advisor, is not licensed to provide investment advice and neither provides investment nor financial advice. Red Rock is a product specialist that can help evaluate your precious metals purchase options.