Don't worship paper money, don't have blind faith in paper money!

Don't worship paper money, don't have blind faith in paper money, or you will lose a ton of purchasing power. History has shown this to be the case time after time!

Economists and TV commentators keep saying that when there's a global economic slowdown, precious metals prices will go down. I don't know whether the second part of their statement is true in the short-run, but in the long-run, it is definitely wrong.

The more important question is: Slowdown of what relative to what?

If car producers have a slowdown in demand relative to fish producers, it may mean you can use less fish to buy more cars, because fish has become more valuable relative to cars. So the fish producers gain purchasing power relative to car producers. The car producers lose purchasing power relative to fish producers.

Even IF globally, there's a meltdown in prices - stocks, housing, agriculture, precious metals, etc - I still think precious metals (and agriculture) will gain in purchasing power relative to other things. The fundamentals for this is so strong.

If there is a collapse in global supply of real goods, real goods will gain in purchasing power relative to paper money (therefore, goods prices in terms of paper money goes up).

If there is a collapse in global demand of real goods, real goods will still gain in purchasing power relative to paper money, because so much has been printed in the past few years. And politicians and central banks are going to print even more during crisis.

It has always been about the transfer of purchasing power (or wealth) from one place to another. If people REALLY understood this principle and how it works, Keynesianism would have been extinct a long time ago. Yet, the majority of the people on the globe still have Keynesian ideas. Whether they identify themselves as a Keynesian or not is immaterial.