The guest on Liberty and Finance, Alastair McLeod, warns that the plight of the British pound sterling is not looking good and could have implications for the global economy. The yield on UK guilds has risen substantially, causing a fall in their value, and the reluctance of the CPI inflation rate to come down has caused a general discontent about the way the Bank of England is handling monetary policy. McLeod believes that the loss of purchasing power of a currency is more important than the level of production in driving prices, and that the idea of inflation being excessive consumer demand is rubbish. He advises investing in physical gold and silver, the only things that will retain value in a general systemic collapse. The show’s featured products are the 2023 quarter ounce Noah’s Ark silver coins and the Atel Preziosi 10 ounce silver bars.
The loss of purchasing power of a currency is driving prices, not the level of production. This situation is caused by the depreciation of currencies. The victims of this situation are low-income individuals who cannot afford to buy basic goods, as well as those without protected pensions. Insurance companies may also face issues with their investments in bonds and may raise premiums or quit high-risk areas altogether. The government has increased tax revenue by not raising tax-free rates, while not cutting public spending. This is a stealth tax increase that disproportionately affects the private sector.
The devaluation of currency leads to stealth tax increases, including thresholds and progressive tax rates that push people into higher income categories. Governments are focused on taxes as a source of revenue, and they grow at the expense of the private sector. The government bureaucracy benefits while the private sector is fleeced. Dependence on government services, such as Social Security, is not a reliable retirement plan due to the government’s mismanagement. The only way to protect oneself is through physical precious metals. The danger of a collapse in the fiat currency is real, and it is difficult to avoid. Watching developments in the British pound sterling and interest rates is important to anticipate any potential impacts on the global economy.