Gold is 'money' in a world in which money is being debased.

Interest Rates

Interest rates over the last 5,000 years in the chart below. The average is about 3%. In January 2017, the interest rates were at record low levels with US treasury about 1.8%.





So, interest rates will have to increase to reach their normal levels.

Impact of increase in interest rates - (data as of Jan 2017) - The US government pays a net interest of US$240 billion at an average interest of 1.8%. It would pay US$680 billion at an average interest rate of 5%. That is, US$440 billion more than today and US$77 billion more than US defense budget.

My note: Note how much impact increase in interest rates have one just one entity i.e. US government. One can imagine the impact it has on various other organizations -
countries investing in US debt like China, India,
mortgage firms,
households who borrow to buy a house,
businesses who borrow

Interest rate cycles last for a really long time, for whatever reason. Sometimes, they last 20 years, sometimes 30 years.

I think we have reached the end of this glorious bull market in bonds. Why? There is utter lack of value. at it's peak in 2016, sovereign debt, principally European, US$14 trillion of bonds were priced to yield less than nothing. In the last 5,000 years history of interest rates, never have important segment of bonds priced as such low level. This means money has 'no store value'.

But why did investors invest in these bonds? This is a mentality that 'I need to have it'. This need to have something that has 'no value' and certainty of loss is what To me, this is a top.

There is a precedent for this, meaning a bull market in bonds, with long trend of falling interest rates and rising bond prices. The bull market in bonds started in 1920 and ended in April 1946. Bond yields reached a low of 2.25 and they have stayed there for the next 10 years. Then they reached 3.25. So, bond yields can remain low for a longtime at very low levels.

Gold

Gold and silver were money for eons.

Gold is not any eternal asset, but it is an asset for a season.

We live in world of Monetary anarchy.

Gold is 'money' in a world in which money is being debased. And in which money is being trivialized and ease of materialization through computer key pads.

When the value of all the paper money - dollar, euro, reminibi - is being debased through taking more debt by central banks (i.e. printing of more money by central banks). Gold is one cur


http://wealthtrack.com/end-of-an-extraordinary-era-james-grant-declares-the-end-of-the-lowest-interest-rates-in-five-millenia-and-warns-of-the-perils-ahead/