The 2023 World Economic Forum (WEF), a gathering of influential government and business leaders from around the world, is underway in Davos, Switzerland, as we write. This year, the WEF coined the term “polycrisis” to define the condition in which the world finds itself.
The WEF defines polycrisis as “a cluster of related global risks with compounding effects, such that the overall impact exceeds the sum of each part.”
The Davos crowd has identified a “cost-of-living crisis” as the number one risk we all face over the next couple of years, and we heartily agree.
The cost-of-living crisis is self-evident to anyone who saves in dollars or in other paper and digital currencies from around the world. We note the irony that this crisis is the doing of many of the self-same folks gathered for this week’s Alpine high-level brainstorming.
Be that as it may, the polycrisis is very real, and at every turn, it makes a dramatic case for owning gold and silver. One doesn’t need to be apocalyptic to reach this conclusion.
In fact, short of that, one should simply ask what happens if the power grid goes down, if solar flares throw the internet into disarray, when the collapse of a major business topples others in its wake, or when a government somewhere collapses, setting off cascading bankruptcies.
What functions best as money in a crisis—or a polycrisis?
(Hint: It has a track record of thousands of years all around the world, you can hold it in your hands, and it can’t be printed!)
Because real life is more vivid than our imagination, here are a few examples of real-world conditions that can suddenly make owning gold and silver imperative.
Bloomberg News reported on January 11 that “the largest U.S. grid operator saw almost one-fourth of power plants serving 65 million people shut down during the Christmas weekend storm….The grid operator [PJM Interconnected] saw 23% of its power-generation fleet shut down on the morning of Dec. 24…PJM manages the electrical network that stretches from New Jersey to Illinois.”
The U.S. government’s fast-growing budget deficit requires the Treasury to offer higher rates to finance its debt, even as an epic battle over raising the debt ceiling appears to be forming.
Here’s Bloomberg from January 9: “The U.S. is expected to run up against its statutory borrowing cap later in the year, and the risk is that lawmakers may resort to a series of can-kicking measures that wind up roiling financial markets.”
We know that American wages aren’t keeping up with inflation, but there’s more to the story. They are running up their credit cards trying to keep up “with day-to-day expenses staying high due to inflation, more Americans are relying on credit cards to make ends meet,” CNBC reports. “As the personal savings rate sank near an all-time low, credit card balances jumped 15% year over year…notching the largest increase in more than 20 years.”
And we should mention that things are looking pretty dicey when central banks are taking huge losses, especially the Swiss, who are expected to know something about gold and unbacked currencies. Yet here’s the Jan. 9 story from UPI about the largest losses ever suffered by the Swiss National Bank, mostly from foreign currencies: “The Swiss National Bank said Monday it was anticipating a $143 billion loss for 2022, the steepest loss in the bank’s 116-year history.”
And we haven’t even mentioned what is right behind the cost-of-living crisis on the Davos list. According to the WEF’s list, in second place are natural disasters and extreme weather events. That would include another polar vortex spillover across the country or atmospheric rivers that turned drought into floods in California. Those are the types of events that can cause real damage to food supplies, transportation, and commerce and turn a crisis into a polycrisis.
But there is something even bigger: the rattling of nuclear arms in a way that hasn’t been heard in more than 60 years.
“One of President Vladimir Putin’s closest allies said…that Moscow was now fighting the U.S.-led NATO military alliance in Ukraine and that the West was trying to wipe Russia from the political map of the world,” Bloomberg reported in January. “Putin casts the war in Ukraine as an existential battle with an aggressive and arrogant West, and has said that Russia will use all available means to protect itself and its people against any aggressor.”
It is not just the European theater that is a tinderbox awaiting a spark.
A CNN account describes the biggest arms race ever seen in Asia: “Three major nuclear powers and one fast-developing one, the world’s three biggest economies and decades-old alliances all vying for an edge in some of the world’s most contested land and sea areas. In one corner are the United States and its allies Japan and South Korea. In another corner, China and its partner Russia. And in a third, North Korea.”
Remember the definition of a polycrisis: “a cluster of related global risks with compounding effects, such that the overall impact exceeds the sum of each part.”
Investing in gold and silver could help protect yourself, your family, and your retirement from the polycrisis.
If you’re interested in investing in precious metals, let us provide you with a free one-on-one consultation.
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.