Our wealth is being destroyed; is this war winnable?
Wealth preservation is not just for billionaires; it’s mandatory for everybody, said E.B. Tucker, author of "Why Gold? Why Now?: The War Against Your Wealth and How to Win It."
"The average person works for dollars and sweats and works extra hours, and sacrifices today for a better tomorrow in dollars. All the while, dollars are becoming less valuable," Tucker told Kitco News.
Part of the reason for the dollar’s devaluation is the continual expansion of the balance sheet of the Federal Reserve, which would inevitably see interest rates go into negative territory.
"The Fed is running out of ammunition. They have thrown everything they have at this economy, and what happens is we get all these unintended consequences, where some people benefit and some don’t," he said. "Next, they’re going to say, you, American citizen, or Canadian citizen, need to help us stimulate the economy. That savings and that bank account could be stimulating the economy and to get you to pull it out we’re going to charge you interest and you’re going to pull that money out and do something with it. That’s coming next."
When the Fed injects liquidity in the monetary system, not everyone benefits; politicians ultimately have the power to decide who receives the most aid, Tucker said.
"If you and I have a company, and we sell bonds – we have a terrible business – and we use those bonds to buy back and to pay dividends, and then the Fed buys our bonds, that’s a very sophisticated form of bailout. Now, if another guy who didn’t have access to that kind of arrangement, he fails," he said. "So what you see now in the crisis economy is that every time there’s a crisis, people cry out for the government to come to the rescue, the government comes in with trillions of dollars borrowed from tomorrow at zero percent, and it gives those trillions of dollars to certain people. Certain people receive the benefit of those trillions of dollars. That is called politicians having power to decide who they save and who they let fold."
On gold prices, Tucker sees the yellow metal heading towards $1,900 an ounce by year end.
"We see it moving toward [the $1,900 price level target] like a magnet," he said.