For over a decade, GoldSilver has championed the truth behind inflation—a truth now gaining recognition across mainstream media. A recent Forbes article echoes warnings about inflation's true impact, barely reflected in official figures.
In a groundbreaking move, HSBC announced a new tokenized gold coin for investors in Hong Kong, potentially revolutionizing gold investing. But is this a new era or just another "paper gold" mirage? Let’s explore.
Key Developments in Gold Markets
Gold Standard Could End Price Volatility
A February study by the Federal Reserve Bank of Philadelphia suggests adopting a gold standard could stabilize long-term prices, aligning them with equilibrium and reducing inflation/deflation cycles.
Gold Hits Record High of $2,224/oz
Gold traded between $2,150–$2,200 this week before reaching all-time highs, driven by expectations of Federal Reserve rate cuts. Traders predict a 64% chance of a June cut.
U.S. Consumer Optimism at 2021 Peak
Consumer sentiment hit its highest level since July 2021, fueled by stock market gains and hopeful inflation trends. The University of Michigan’s sentiment index rose to 79.4.
Fed’s Record $114.3B Operating Loss in 2023
The Federal Reserve reported unprecedented losses due to high interest expenses ($281.1B), halting Treasury payments. Income from assets was $163.8B.
Why Inflation Reports Mislead
Mike Maloney and others have long warned about eroded purchasing power. A Forbes analysis reveals cumulative inflation since 2020 at 20%—meaning $100 in 2020 now costs $120. Traditional 12-month snapshots (e.g., "4% inflation") obscure this wealth erosion.
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HSBC’s Gold Token: Innovation or Illusion?
HSBC’s tokenized gold for Hong Kong retail investors merges blockchain with physical gold. However, the fine print raises red flags:
- Not Physical Gold: "Investment in the Product is not the same as acquiring a physical gold bar."
- No Delivery Option: "Investors cannot take physical possession, even in bank insolvency."
- Trading Suspensions: "The Bank may suspend dealing."
Experts caution against digital IOUs, emphasizing the security of physical bullion.
FAQ
Q: Is tokenized gold as safe as physical gold?
A: No. Tokenized gold relies on the issuer’s promise, unlike physical gold held directly.
Q: What’s the chemical symbol for silver?
A: Ag (from Latin Argentum), just as gold is Au (Aurum).
Q: Why did gold prices surge this week?
A: Expectations of Fed rate cuts weakened the dollar, boosting gold’s appeal.
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Brandon S.
GoldSilver