Falling birthrates are a mounting challenge worldwide, particularly pressing in the West. As birthrates decline, the aging population grows, placing immense pressure on social support systems, healthcare, and the workforce. With fewer young people entering the job market, economic growth slows, and the burden of supporting an older population falls disproportionately on a shrinking pool of workers. As birthrates decline, countries are forced to run even higher deficits, spurring inflation, which, in turn, results in an even greater affordability crisis, thereby putting additional pressure on birthrates. As this plays out, many are turning to gold as a hedge. And, few countries are suffering from the demographic crisis the way Italy is.
On a recent trip, Aaron delves into the economic impact of Italy’s declining birthrate, one of the lowest in the world. Sadly, Canada may be on track to face the same economic challenges.
Silver is Outperforming Gold
Andy Schectman, whose company has sold billions worth of gold and silver over the years, is bullish on silver. He believes China is cornering yet another precious metals market.
In this recent video, he explains why silver has some of the best investment fundamentals he’s seen in his over three-decade career. Silver is now above $34 per ounce, trading to fresh multi-year highs this past week. Still, despite silver’s rally, the current gold-to-silver ratio stands at about 80:1. With a historic average of between 15:1 and 60:1, many believe the industrial metal to be undervalued.
Gold Remains Ultimate Hedge Against Inflation
In a world of economic instability, persistent inflation, and geopolitical turbulence, one asset continues to shine brightly: gold. Despite failing to perform in 2021 and even 2022 as consumer price inflation took off in the U.S., gold is now leading other assets higher. Gold is up about 40% this year and traded to a new all-time high today. While most don’t think of falling birthrates as a precursor to higher gold prices, it is part of why governments are choosing devaluation.
The Most Trusted Hedge Against Inflation
Gold remains a trusted hedge against inflation because its intrinsic value doesn’t depend on any particular currency or economy, making it less vulnerable to inflationary pressures. Gold has no counterparty risk. Unlike paper currencies, which can lose purchasing power as governments increase the money supply, gold retains value as a physical asset with a finite supply. Investors appear to wake up to this reality and rush into the precious metal.
Consider this:
In 1929, buying an average house in America cost 188.7 ounces of gold. Today, it costs 154 ounces of gold to buy an average house in the U.S.
Over the last one hundred years, houses have gotten cheaper in gold…
Investors would be wise to consider why gold is hitting new all-time highs almost daily. As governments attempt to print themselves out of insolvency, many countries appear to be entering or are already in an inflationary depression.
