Why Do I Want Gold and Silver??

Sound Money in a World of Fiat Money Chaos


Mike Maharrey Mike Maharrey
Midweek Memo
February 5th, 2025 Comments

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The powers that be may have found a new scapegoat for price inflation -- tariffs. 

But while tariffs will raise some prices, they don't cause "inflation" in the true sense of the word. Governments and their central banks do that, but they don't want you to know it. 

In this episode of the Money Metals' Midweek Memo, host Mike Maharrey explains why tariffs won't cause inflation (as properly defined) and spotlights the true cause of our inflationary woes - fiat money systems. He goes on to explain how this answers the question, "Why do I want gold and silver?" 

Because it's sound money in a world of fiat money chaos.

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"Why are you so into gold and silver?"

"People ask me that sometimes. Quite frankly, I think it’s kind of a weird question. You would never ask somebody, “Why are you so into dollars?” right? The answer is self-evident. Dollars are money. Of course, you want money. Well, gold and silver are money too. So, when people ask me why I want gold, in my head, I hear them asking, 'Dude, why do you want money.' Well, duh."

But why gold and silver specifically? Why not just stick with dollars?

"Well, they are real money. They are sound money. They hold their value over time, unlike government fiat currency that is constantly being devalued by the governments that issue it."

Mike points out that an ounce of gold bought a fine suit in 1900 and that same ounce of gold buys a fine suit today. 

"It’s not that a suit costs more. It costs the same. But the government and its central bank have dramatically devalued the dollar. Gold on the other hand remains a constant store of wealth.  It’s not just about dollars. Every government debases its currency."

Mike highlights Australia where gold gained 38 percent in 2024 and dramatically outperformed other assets. Meanwhile, the Aussie dollar got battered, dropping by 10 percent in relation to the U.S. dollar. 

"People often refer to the dollar as the cleanest dirty shirt in the laundry. That’s because it's losing its purchasing power, but not quite as quickly as many other global currencies. But do you really want to wear a dirty shirt? Gold is the clean shirt in the drawer. It holds its value as fiat currencies, including both the U.S. and Australian dollars, decline. Again, gold is real money, as evidenced by its performance in the recent inflationary surge."

Mike points out an important reality - inflation isn't an accident. 

"Politicians and pundits throw up their arms and act like the cause of inflation is some kind of mystery. 'It just happened. We thought it was transitory but looks like it’s here because of the reasons.' Well, I’ll tell you the reasons. Your dollars are losing their purchasing power keep making more and more of them. They have to. It’s the source of their power."

Mike notes that gold and silver are often considered "safe haven" assets. They hedge against risk.

"Well, risk is inherent to any fiat money system because governments and central banks always cave to the temptation to inflate the currency. This leads to constant devaluation of the money manifesting in price inflation. It also causes economic distortions, incentivizes debt, and fuels boom-bust cycles." 

He highlights another harsh reality.

"As long as governments have access to a money printing press, they will use it. That means fiat systems will always feature currency risk. And that’s why I want gold."

But government people don't want you to blame them for prices going up, so they blame it on all kinds of other things - greedy corporations, supply chain issues, pandemics, "Putin's price" hikes, voodoo. The list goes on and on. 

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Now they've found a new scapegoat -- tariffs.

At least two Fed officials have hinted that tariffs might be inflationary. Reuters summed up the situation, reporting, “Economists broadly expect the tariffs will push up inflation and depress growth, but are struggling to measure to what extent, given the fluidity of the situation.”

So, what’s the deal? Are tariffs really going to push up inflation? Well, it depends on how you define inflation.

"If by inflation, you just mean some prices are going to go up, sure. Tariffs will definitely do that. But if you define inflation in the traditional economic sense, then no. Tariffs aren’t inflationary."

Mike goes into a detailed explanation of how politicians and pundits can blame other factors for inflation because they've redefined the word. When people say "inflation" today, they mean prices going up. But historically, "inflation" meant an increase in the money supply. This monetary inflation causes price inflation. 

"Of course, the government and its central bank would prefer you don’t realize they are causing prices to go up. That’s why they have conflated monetary inflation and price inflation. By defining "inflation" as rising prices (the consequences of their monetary inflation), they can blame price increases on other things, including greedy corporations, Vladimir Putin, and now Trump tariffs."

Mike emphasizes that tariffs will raise prices. They could raise a lot of prices. But they won’t cause all prices to rise. That only happens with an increase in the money supply.

Mike uses a simple anecdote to illustrate how monetary inflation raises prices. 

"So, while tariffs will put upward pressure on a lot of prices, they won’t impact all of them. It won’t cause “inflation.” The Federal Reserve does that by creating money and incentivizing debt. But Powell & Company over at the Fed would sure like you to think tariffs are causing price inflation. That gets them off the hook and allows them to quietly keep creating inflation while pointing the finger of blame across the street at the White House."

In fact, despite some hawkish rhetoric out of the January Federal Reserve meeting, the central bank is creating inflation as we speak. The M2 money supply has increased by nearly $1 trillion in the last year. That is, by definition, inflation. 

"And this, ladies and gentlemen, is why you want gold and silver."

Mike closes the show with a call to action, urging listeners to call Money Metals at 800-800-1865 to get some gold and silver today.

Articles Mentioned in the Show

Gold Helps Protect Australians Against Depreciating Aussie Dollar

Ongoing Gold and Silver Drain in London Pressures Prices Higher

Fed Hits Pause; Tells Us What We Already Know

The Fed's Catch-22 and the Case for Precious Metals

Mike Maharrey

About the Author

Mike Maharrey

Mike Maharrey is a journalist and market analyst for MoneyMetals.com with over a decade of experience in precious metals. He holds a BS in accounting from the University of Kentucky and a BA in journalism from the University of South Florida.