The Magazine for Asian Investors
Inflation on the rise
Inflation has taken on more than alarming features in large parts of the world since the beginning of the year. Inflation figures from the U.S. have already risen to over 5%. In the EU, the inflation rate has already reached 3.9%. Plenty of reason to worry, as the purchasing power of fiat currency holders continues to decline. What’s more, governments have guaranteed that your savings will continue to lose value. Only politicians manage to sell inflation as good news.
No end in sight
Recently, voices from the Federal Reserve have become louder in favor of starting the tapering of quantitative easing soon. However, the timing is still open as to when the start will be, as the latest labor market figures disappointed. Thus, loose monetary policy will remain in place for the time being. Experts see a great danger in quantitative easing because a lot of liquidity is being created without a value base behind it. Following the weak labor market figures, experts are warning of the first signs of a slowdown in economic growth.
In addition, there is the uncertainty factor of new covid-19 variants. Many expect further outbreaks of more variants in the winter months.
Experienced investors have already recognized the signs of the times and have already taken the first steps. The past has shown that the response of governments to crises is always a massive increase in liquidity. The asset class that always responded positively was precious metals. When investors fear for their purchasing power and lose confidence in fiat currency units, they look for safe havens like gold and silver.
Gold and silver have already seen small rises. The gold price is currently at $1829 per ounce. The silver price at the moment at $24.75 per ounce. Since the prices are still below last year’s highs and there is still a lot of upside potential, investors could still take advantage of the opportunity.