The Energy Factor to Push Gold to New Highs Filed in Energy, Precious Metals
However, the world may not have the available energy supply in the future to satisfy these massive debts.
Gold and silver are monetary metals because they function as a store of “Economic Energy”, a term coined my Mike Maloney. Basically, the precious metals are batteries that store this trade-able energy value.
In the past when a country would print too much fiat money (not backed by gold), economic upheaval would occur as the public lost faith in the currency. To restore faith back in the system, the government(s) would revalue the price of gold relative the amount of fiat currency in circulation.
Unfortunately, this method will not work this time around as the world may not have the “affordable” energy supply to repay all these debts, regardless if the currencies were backed by gold or not. That is why it may be more prudent to look at gold’s value relative to the price of oil.
An important aspect in determining gold’s value is its energy cost.