Interest Rates: The Silent Killer

Alasdair Macleod and Cherie Leeden are this week’s guests.

Rising bond yields are deferring the prospect of a central bank pivot away from fighting inflation to tackling a widely expected recession. Investors wrongly assume that price inflation will fall in a recession, leading to lower interest rates. History tells us that monetary debasement, rising prices, and a slump in business activity go together. Indeed, a slump in economic activity is almost certain, but interest rates will continue to rise reflecting declining purchasing power for fiat currencies. There is nothing the monetary authorities can do to prevent it and consequently a cyclical banking crisis, this time including both central and commercial banking systems, is bound to result.

Alasdair points out the consequences of not understanding the true role of interest rates, the fallacies surrounding commodity price formation, and why a general glut cannot happen, which according to the Keynesians drives recessions. Blaming inflation on Russia or other external forces cuts no ice. Our crisis is entirely of our own making. Rising interest rates are a silent killer of currencies as central bankers are ultimately forced to print more money, faster and faster, simply to service debt. The ultimate end is an essential return to gold which is the only money there is. Everything else is credit. 

Cherie’s Gold Bull Resources has a 500,000-ounce gold resource. She explains how the company is setting out to dramatically increase those ounces representing true money in the ground.  

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Alasdair Macleod has a background as a stockbroker, banker and economist. He is a Senior Fellow at the GoldMoney Foundation and Head of Research at Goldmoney.  His experience encompasses equity and bond markets, fund management, corporate finance and investment strategy. His weekly articles written for GoldMoney are posted on his blog at https://www.goldmoney.com/research/goldmoney-insights Because of his deep insights into underlying market dynamics, Alasdair is one of the most frequent guests on Turning Hard Times into Good Times.

Cherie Leeden is a geologist who has worked for Rio Tinto and LionOre. Over the past 20 years she has proudly promoted a responsible mining industry. During the past 10 years she has worked as a CEO including a stint at Battery Minerals. She is the founder of a private natural resources project generation company, NV Resources and was a local director for Hog Ranch Minerals Inc. (Rex Minerals Limited). Over the past five years she has been focused on Nevada gold exploration where she has lived during that time. Cherie has a record of negotiating and executing win-win business transactions with Fortune 500 companies.