Mario Innecco: RISING gold prices spell TROUBLE for the dollar and other fiat currencies

 The rising prices of gold mean that the dollar and other fiat currencies are going down, according to financial commentator Mario Innecco.

"Yes, it's a good thing for stackers when the prices of gold and silver go up in dollars," he told "Liberty and Finance" host Elijah K. Johnson on Dec. 5. "But the other way we need to look at it … is that the dollar is going down versus gold and silver in the long term."

Inneco cited Venezuela as an example of this. The South American country's fiat currency, the bolivar, became worthless when the gold trading faltered. "I think the same thing is [going to] happen to the dollar and all the other fiat currencies vis-a-vis gold and silver," he added.

Meanwhile, Johnson remarked that people were seeing a new intra-day high for gold prices, surging above the $2,150 mark. Innecco said some friends told him about this development, but he advised them not to get too excited and to just stay level headed.

Innecco, a financial markets and macroeconomic analyst, said he had seen gold rise to $2,130 before going down to around $2,070 – its all-time high from 2020. Days before, it closed at $2,072, just above the 2020 spot price.

Johnson's guest commented that while the price of gold fluctuates, its value hasn't changed. In contrast, fiat currency changes because the central bank issues too much of it.

Greenback lost 98% of its value versus gold in 1971

Innecco also recounted how the dollar lost 98 percent of its value versus gold back in 1971, when former U.S. President Richard Nixon closed the gold window that year. He added that some people will trade gold for fiat money, something he called a completely different game.

Johnson meanwhile remarked that the volatility in the gold market has caused worry among people. In response, Innecco said key technical levels being breached in the last few years is the reason.

He also shared that based on a report about the Sharpe ratio of certain investments, gold was third on the list. In contrast, cryptocurrency was way low on the ranking. According to Investopedia, the Sharpe ratio "compares the return of an investment with the risk."

"It's actually a very, very stable if you want to call it investment. I think the top two were like long and short hedge fund portfolios or stuff that was really hedged," said Inneco.

The analyst also warned that putting gold with the banks in exchange for fiat currency is a bad idea since it won't be even legally owned by someone, essentially making it an unsecured loan. He also advised against having a lot of money in the bank, given the multiple bank failures that happened in March. According to Innecco, the latest Federal Deposit Insurance Corporation (FDIC) numbers weren't very good when it came to the unrealized losses on securities.

He ultimately asked viewers whether they want to finance the current administration in the U.S. or the U.K., which has allowed migrants in. Keeping fiat currency in the bank means people are indirectly financing their own collapse.

Mario Innecco: RISING gold prices spell TROUBLE for the dollar and other fiat currencies Mario Innecco: RISING gold prices spell TROUBLE for the dollar and other fiat currencies Reviewed by Your Destination on December 09, 2023 Rating: 5

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