The euro has lost 89% of its value compared to gold, in 25 years.

In 1999, one euro could buy 124 mg of gold. In 2024, one euro can buy only 12.7 mg of gold.

Welcome to the newsletter that offers you an in-depth look into the world of finance, investments, and precious metals. As an advisor, I emphasize the importance of asset safety and diversification, believing these factors are fundamental to successful investing.

General Overview

• The latest review of financial market activity shows that, following the panic caused by Japan's "carry trading" issues, things are at least temporarily calming down. But for how long?
• Analysts from various sectors claim that concerns about a U.S. recession are unwarranted, but JPMorgan has increased the probability of the U.S. entering a recession by the end of the year from 25% to 35%.
• The euphoria surrounding artificial intelligence seems to be fading, as many leading companies have invested enormous sums of money to keep up with the AI trend. However, the results of these large investments will only become apparent in the future.
• Geopolitical tensions around the world continue to escalate, both in Ukraine and the Middle East. The trade war, primarily between the U.S. and China, is taking on new dimensions, further complicating an already complex international situation.

China's Hunger for Commodities

• Much can be inferred about China's activities from the article below, published in The Economist on July 23, 2024, which discusses China's growing need for commodities due to population growth and industrial development. Despite economic difficulties, the country continues to import large quantities of raw materials, indicating concerns about new geopolitical threats. China relies heavily on foreign resources, particularly for food, energy, and raw materials.

Corporate bankruptcies in the U.S.

In June, the number of new corporate bankruptcies in the U.S. increased to the highest level in the last 12 years. This reflects the challenging economic conditions and higher interest rates that companies are facing.

ECB Wants Digital Currencies, but the Fed Doesn't?

• Jerome Powell explains that the U.S. Federal Reserve does not have the authority to issue a central bank digital currency. He states that the Fed continues to monitor the development of central bank digital currencies and digital payment methods worldwide but is not interested in issuing its own currency.
• The European Central Bank, on the other hand, is taking a completely different approach, preparing the groundwork for issuing a digital euro. In collaboration with the national central banks of the euro area, they are exploring the possibility of issuing a digital euro, which would be an electronic equivalent of cash.

How Are Existing Currencies Faring?

• Since 2000, the U.S. dollar has lost 45% of its purchasing power. This means that $100 from the year 2000 would have the same purchasing power as approximately $182.45 today, an increase of $82.45 over 24 years.

How Do Currencies Compare to Real Money – Gold?

• All of Japan's recent troubles were accurately predicted by gold. Gold is a predictor of economic instability and financial crises. Many analysts have used gold prices to forecast economic problems, as gold often increases in value during times of uncertainty in other markets.
• Regarding Japan, some experts have pointed to the rising price of gold as an indicator of economic troubles in the country, including debt issues and demographic challenges. Gold has made the most significant gains in value against the Japanese yen since the beginning of the year.

The Euro Has Lost 89% of Its Value Compared to Gold

• In 1999, one euro could buy 124 mg of gold.
• In 2024, one euro can buy only 12.7 mg of gold.

Another Proof of Gold's True Value After 2,500 Years

• Researchers from the University of Michigan's Notion Archaeological Project have made a significant discovery. A team of archaeologists uncovered a "hoard of gold coins" from the Persian Empire in western Turkey. The coins, depicting a kneeling archer, are consistent with the Daric, a type of gold coin used in the Persian Empire. The coin was in circulation from the late 6th century BC until Alexander the Great's conquest of the Persian Empire in 330 BC.

Gold Has Also Outperformed Commodities

• History shows that commodity prices also tend to follow gold's price movements.

Best regards until next time,

Peter Herman

The newsletter "Financial View Peter Herman" does not constitute an investment advisory service. Its content does not constitute recommendations for purchase or offers to purchase. For all advice and suggestions, I am available with an individual consultation or via email [email protected].