No Man Made System Will Ever Last

The world gets a new monetary system every 30 or 40 years, and it’s past time for a change.

Financial educator and precious metals expert Michael Maloney has made this observation, based on his extensive study of economic cycles, for years. We had the classical gold standard from 1871 until World War I, the gold exchange standard between the two world wars, the Bretton Woods international monetary system from 1944 until 1971, and since 1971, the entire world has been on the dollar standard.

“So we are already overdue for a new worldwide monetary system,” Mike says, “and this is a normal thing. It will be this way as long as governments don’t allow the free markets to work.”

As more and more investors emerge from the darkness, they begin to see economic cycles as they really are. They will no longer see their financial lives flash before their eyes as the stock market lurches from one level to another. The cycles are becoming apparent to people who pay attention, who can see patterns, and who are not distracted by the flashing lights of stock market tickers.

Monday’s Financial Times has an article (Supercycle argument ‘remains intact’) about the commodities supercycle—a pattern that has appeared as emerging economies try to satiate their ravenous demands for growth, and as beleaguered investors tire of Wall Street’s oligarchy over banking and investments. The traces of this supercycle come in the form of fresh nominal highs in gold, copper, and the Reuters-Jeffries commodities index. Silver is near 30-year nominal highs, and BHP Billiton, the world’s largest mining company, is making new highs as well.
“In addition to the growth prospects, the notion is commodities are a natural hedge against event risks because they behave differently to other financial assets and often perform well in periods of rising inflation, political uncertainty and climate change – events that tend to have a negative impact on equities and bonds.”

http://www.wealthcycles.com