![\"\"](\"https:\/\/waveneyeconomics.com\/staging\/wp-content\/uploads\/2020\/04\/Wheelbarrow-Wallet-300x235.png\")
<\/em><\/p>\nA wheelbarrow instead of a wallet to carry money around in 1923\u00a0 <\/em><\/p>\n Initially, German consumers did not notice. When consumers started to realise their weakening purchasing power, that\u2019s when prices started to move fast. Between 1921 and 1923, specifically in 1923, the money printing press went into overdrive as wages shot up to compensate for higher grocery prices.<\/p>\n So much paper money was printed and so fast did prices rise that German workers were paid twice a day, in the mornings and in the afternoons. German housewives would collect their husbands\u2019 wages just before lunch to buy groceries immediately. Otherwise, grocery prices would rise before the evening\u2019s wages were paid.<\/p>\n In such a hyperinflation scenario, gold was and is always one of the many winners. Unlike paper money, the quantity of gold is fixed by Nature. When we put the two together, more paper money needed to be exchanged for gold as the chart below shows.<\/p>\n Value of German Papermark against gold (1918 \u2013 1923)<\/u><\/strong><\/p>\n Expectedly, gold prices in the past few years have been moving up in tandem with the frenzied activity of the world\u2019s money printing press. With more money printed this time round compared to 2008 onwards, it is reasonable to expect gold prices to rise above that set a few years ago.<\/p>\n But can it go up to those crazy highs seen in 1923? It depends on when economic activity is restarted. And this depends on our dear enemy the Coronavirus.<\/p>\n The prevailing sentiment is that our dear enemy will be here with us till next year. If that is the case, then gold prices should easily go above and beyond the last peak of US$1,912 an ounce in 2011.<\/p>\n Gold prices in US$ (2006 \u2013 Mar 2020)<\/u><\/strong><\/p>\n People are wondering whether gold prices will rise above that set in Let\u2019s put on the optimistic hat today amidst all the pessimism. Last week, I mentioned that this virus scourge should be over by this autumn based on my analysis of long term economic cycles. Mind you, such analysis can be misleading and downright inaccurate.<\/p>\n Holding on to my optimistic hat, gold prices can cross US$1,912 this year but are unlikely to shoot up to the stratospheric heights seen in Germany in 1923. But gold prices can still go way up for other reasons down the road. Stay tuned for more stories from this website.[\/vc_column_text][stm_share_buttons][stm_post_comments][\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=”Recent Articles” font_container=”tag:h4|text_align:left” use_theme_fonts=”yes”][stm_news loop=”size:3|post_type:post” view_style=”style_5″ img_size=”thumbnail”][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":" Once again, the world\u2019s central banks and policymakers have banded together to print and spend lots of money to revive our sick global economy.<\/p>\n","protected":false},"author":3,"featured_media":7102,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-6847","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-moneytalks"],"yoast_head":"\n![\"\"](\"https:\/\/waveneyeconomics.com\/staging\/wp-content\/uploads\/2020\/04\/German-Papermark-240x300.png\")
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\nrecent years<\/em><\/p>\n