It was a lingering market response to the political uncertainty after denouncing the Iran Nuclear Deal
on the part of the USA. Donald Trump disregards his European allies who were coming to the White House
in the past months literally begging him not to denounce the Deal. The cooperation of Europe and USA has dropped to its lowest level in the last 75 years. Not only did Trump denounce the Iran Nuclear Deal while threatening the stability in the Middle East so necessary for Europe but he also announced the introduction
of duties on imports of European steel and aluminium.
is under serious threat. Its debt is at 130% of GDP, Italy’s banks are still teetering on the precipice with the announcement of eurosceptic government coming. The crisis around Italy is similar to the crisis in Greece. Though, it is much worse since it is the third largest economy in the European Union. The euro immediately responded to the bad news from Italy by weakening against the dollar. The price of gold in EUR has climbed to its maximum for the last 10 months while exceeding the limit of EUR 1,130 per ounce troy.
we are commemorating the 65th anniversary of the monetary reform in Czechoslovakia. The average devaluation of currency was 10:1, i.e. the population obtained in average 100 crowns per 1,000 crowns.
The monetary reform is the way how to devalue savings of population and deceptively simply to solve the economic problems. It is clear that the issuing state can do with the value of paper money whatever
it wants. In the current globalised economy, problems of Turkey and Argentina are transmitted to other developing markets. Since the beginning of the year, investors that own shares and bonds of these states have lost more than 10%.
At this moment, the total debt levels are approaching 2.2 trillion CZK. These are mainly mortgages; however, consumer debts are also growing. Nobody can believe that all the debts will be repaid. The current growth
in living standards is driven by debt, and it cannot continue indefinitely. The debt bubble has to burst eventually with the system falling down under a weight of debt.
We recommend our clients to save a part of their financial reserves into precious metals, especially gold, which has been a store of value over centuries. In mid-June, there is going to be the US Federal Reserve meeting where the US interest rates may be increased again. In the past, this event was preceded by a short-time decrease of gold price. This moment is being used by investors for buying precious metals.
Chief Executive Officer of IBIS InGold®, a. s.