Over the last month, the U.S. government has printed more money than was printed during the nation’s entire 244 year history. Why is this being done, and what does it mean for the price of gold and precious metals?

The Government’s Pandemic Response

The coronavirus has prompted governments both in the U.S. and around the world to take extreme measures. In the USA, over $40 billion that was reserved for disaster relief is now being allocated into weekly checks that are being sent out to the millions of Americans who are now unemployed due to the virus shutdown.

Some economists have pointed out that while this arrangement will work in the short term, it is not a long term solution. Sending out weekly checks makes the population dependent but even worse; it expands the money supply, which lowers the value of the dollars. The American government now faces a dilemma. If they continue sending out weekly checks, the money supply will balloon and the prices of basic goods and services will rise to the point where the checks won’t cover them. However, if they stop sending the weekly checks, millions of Americans will be left penniless and unable to pay their bills.

Gold Wins No Matter What Happens

This is why gold has exploded in value over the last month. While the government continues giving free handouts to the population, the economy has become stagnant due to the lockdown. Even worse, tens of thousands of small and medium sized businesses are now bankrupt because they were declared “non-essential.” Yet it was these businesses that employed most of the population before the pandemic.

Senator Ted Cruz has proposed eliminating taxes while gradually ending the stimulus program to maintain the strength of the dollar while taking the tax burden over off businesses and Americans that are looking for work. It’s a decent plan, but will not alleviate the severe pain that will ensue if the weekly checks are stopped for any length of time. For many Americans, these weekly checks are the only thing keeping them from being evicted or having their homes foreclosed.

That being said, money printing has never and will never create true economic prosperity. What it does is guarantee a collapse in the future along with the evaporation of hard earned wealth. It takes money from those who worked hard and saved and then transfers it to those that didn’t, and ultimately, everyone loses, except those that own gold.

Precious Metals Are The Only Real Solution

Some clever Americans are now taking their weekly stimulus checks and using them to buy gold or silver coins. These wise individuals understand that the U.S. is on the precipice of both a deflationary or inflationary depression and the only way for one to protect themselves and their wealth is buy investing in hard assets that can’t printed out or electronically generated on a computer screen.