(Ken Silva, Headline USA) In what could be a harbinger of things to come for the U.S., the New York Times reported this week that Egyptians are flocking to gold as the country’s fiat currency, the pound, collapses.
The March 5 Times article reported that demand for gold in Egypt has more than doubled, and that the value of the yellow metal has increased by more than 30 percent compared to the country’s fiat currency since September.
Gold still isn’t being used widespread as a medium of exchange in Egypt—the Times reported that many citizens are now using the black-market U.S. dollar as their preferred currency—but the government is reportedly moving in that direction.
“The market grew so fevered that the government announced in November that it was partnering with a financial technology company to install A.T.M.s that would dispense gold bars instead of cash,” the Times reported.
The Times article is the latest admission by mainstream sources that the demand for precious metals is skyrocketing fiat currencies collapse.
Reuters reported last month that the price of one gram of silver more than doubled in a year to 47 Egyptian pounds—though it remains far cheaper than gold. The price of a gram of 21 carat gold rose more than 120% to 3,875 Egyptian pounds during that same time, according to Reuters.
“Silver is the new gold,” said a salesman at a Cairo silver store told Reuters.
There doesn’t appear to be an end in sight for the Egyptian demand for precious metals. The Egyptian pound further crashed Wednesday as the government initiated a devaluation of more than 38%, while also hiking interest rates, according to an article in Zero Hedge.
Reacting last month to the skyrocketing silver demand in Egypt, the online bullion dealer Money Metals recommended that Americans consider following the lead of their Egyptian counterparts in hedging against their fiat currency.
“With silver significantly underpriced, and gold set up for a bull run when the Fed returns to its inflationary policies, Egyptians seem to be making a smart choice,” stated Money Metals analyst Mike Maharrey. “And it might not be a bad idea for Americans as well.”
Ken Silva is a staff writer at Headline USA. Follow him at twitter.com/jd_cashless.
