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Thorsten Polleit Interviewed on Gold

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10/28/2013

Mises Institute Associated Scholar Thorsten Polleit is interviewed on gold and central banking in the Swiss publication Finews.ch. The interview titled "Central Banks Have Built a Potemkin Village" is available in the original German here, and in the English (Google Translate version) here. Loosely translated:

Q: Mr. Polleit, after some twelve years of the gold bull market, it now appears noticeably to have lost its luster. Do you agree?
A: As long as the central banks printing money and manipulating interest rates so that the paper money regime does not collapse, the market forces are suppressed. That should be known by every investor. In principle, the central banks have built a Potemkin village. Therefore, the main trend in the price of gold is still intact. But the paper money system that existed in the past hundred years, can no longer continue. So far, the strategy central banks have used works quite well. In fact. As it turns out, this little game can be kept up for a long time. Many investors were assuming that the system would collapse much earlier and were then surprised that it still holds so long. ...
Q: With what consequences?
A: The extreme case occurs when the demand for newly-created fiat money dries up and the people are no longer willing to hold the newly created money and instead take refuge in gold, real estate, and other assets. But this development is not yet apparent. Not yet.

Read the full interview.

Peter G. Klein is Carl Menger Research Fellow of the Mises Institute and W. W. Caruth Chair and Professor of Entrepreneurship at Baylor University's Hankamer School of Business.

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