In Jim Cook's Archive


The British economist John Maynard Keynes laid out an economic strategy for dealing with economic disasters. Our president is following the Keynesian formula to a T. He’s inflating just as Keynes advocated. Keynes thought inflation to be inevitable and useful. Mr. Trump is getting new money into people’s hands and encouraging them to spend it. He is starting a huge public works program. He is keeping interest rates low and pushing the Federal Reserve to ease further. There seems to be no limit on the government’s spending and the President wants to spend more.

A lot of writers of conservative persuasion and most especially gold advocates are highly critical of this loose money policy. However, what would you do if you were calling the shots? You would probably come to fear deflation and depression. So you would likely follow the Keynesian formula. You would do what our government is doing and inflate even though there could be harmful consequences. There really isn’t much choice unless you want to bring on a painful depression. Once you start the Keynesian policy it’s impossible to stop it without a crisis.

We know that Keynesian monetary policies can debase our currency. Rather than criticize the policy we should hedge against it. Gold and silver are the premier assets relied on to offset the damages of inflation. The monetary response to the COVID outbreak and a shattered economy are causing more investors to turn to gold and silver. Of the two, silver appears to offer the best chance for extraordinary gains. John Maynard Keynes didn’t have much use for gold as money. Maybe he was buying silver.

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