Remember Budapest, Hungary??
/Many of us experienced the inaugural m3 together. No doubt about it…one of the best experiences of a lifetime. Hungary is a truly beautiful country that has rebuilt itself, time and time again, from more wars than most can even remember. That may be happening again soon…however this time it will likely be an economic war.
The news hitting the markets on Hungary now is plain scary. Monetary inflation is kicking in big time and they have been forced to raise their key interest rates over 3%... in ONE day… to over 11.5%.
The reason? Mounting debt (along with the local printing press) is putting significant pressure on the Hungarian economy, and their hope is that this move will strengthen their currency and head off a massive inflationary buildup.
So, why did I go to the trouble to point this out via an update? Why is it such a big deal? It will likely be a microcosm of what’s to come throughout Europe, and ultimately here in the US as well. If you’re getting a flashback to life in the US during the late 1970’s, then your finely tuned instincts are kicking in.
Our financial systems are deleveraging. It’s actually a good thing, because the purging must first take place before the imbalances are corrected….but for many it will feel like the 1930’s all over again.
So….deflation is the current global fear right? Tell that to Hungarians. When this new global reality begins to kick in, look for eerily similar things to begin happening here at home. That’s when precious metals will really take flight.
Kip Herriage
Editor, VRA
