Rafi Farber on Palisades Gold Radio
Tom welcomes a new guest to the show, Rafi Farber. Rafi is an investor, author, and proponent of the Austrian Business Cycle. His investing approach includes gold, silver, and various associated stocks and investment vehicles.
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Rafi discusses how the stimulus programs and lockdowns are altering the fabric of society. Money supply has gone vertical (hyperinflationary), and the Fed has stopped publishing weekly figures. This is already affecting the commodity space despite a massive reduction in demand. The demand decline briefly reduced inflationary pressures. However, there will be no way to avoid the coming collapse when it becomes evident that food prices are out of control.
Rafi argues that gold and silver are not inflation hedges but instead are money itself. The only reason the dollar has any value is that it can still buy precious metals. When the true supply of physical gold is revealed, expect panic and a rapid purchasing power shift.
Futures markets consider silver to be an industrial commodity, and they are entirely unprepared for a monetary panic. We already see bullion sales going through the roof, and only a tiny percent are aware. Rafi argues that the Comex will be hard-pressed to source more metal at current prices.
He demonstrates how a run on silver is equivalent in many ways to a bank run. Such a run can become a positive feedback loop as the “price” rises. He discusses the significant short positions and why banks are oblivious to the consequences. He says, “Paper is diverting value away from real money.”