By James Passin
The chain, thank God!
the chain is broken,
Its severed links may do us harm;
But the Grand Fiat has been spoken,
And free forever is the arm.
-“Admonition” by James Madison Bell-
Twenty-two percent of all U.S. dollars in circulation were printed last year in 2020. This unrelenting monetary expansion has driven up the price of all financial assets to ridiculous levels and has set the stage for the Era of Hyperinflation. The devaluation of U.S. dollars against Bitcoin (“BTC”) is but one manifestation of the corrupt inflationist monetary policies that continue to enrich monopoly tech rent extractors while inflating the prices of critical raw materials, such as lumber, gasoline, and wheat.
Under the malign spell of Modern Monetary Theory (“MMT”), governments believe that it is possible to print an unlimited amount of money without causing hyperinflation through the imposition of confiscatory taxation rates. This merger of de facto socialist dogma with magical thinking has the potential to undermine sociopolitical stability while creating an extraordinarily dangerous environment in which to deploy risk capital.
The holders of real assets are generally the winners of hyperinflationary epochs. However, it remains an interesting question to consider the dangers of primarily holding assets that exist purely as a result of the action of the State, such as real estate concessions. The proliferation, dissemination, and hardening of MMT dogma will provide a cover for the State to use all of its tools and powers to extract ever more cash through rising tax rates and other fees. The “New Green Deal” would close the loop by enabling the imposition of unlimited and arbitrary “Carbon Taxes.”
Holders of these forms of portable wealth will prove to be the ultimate beneficiaries of the Era of Hyperinflation: rare and generic gold coins certified, graded, and in sonically-sealed, tamper-evident holders of the Professional Coin Grading Service and Numismatic Guaranty Corporation with Certified Acceptance Corporation stickers; platinum bullion coins and bars; and cryptocurrency securely stored in hardware wallets.
Outside of monetary policy considerations, platinum is positioned to benefit from the exponential growth of hydrogen energy as platinum plays a critical role as a catalyst in hydrogen fuel cells. The huge momentum behind “clean energy technology” is setting the stage for the rebranding of platinum as a “Green Metal.” In the short term, the slowly growing potential for military conflict between Russia and Ukraine has created the outside chance of future USA sanctions against Russian metal exports, which would have a massive impact on palladium and platinum, as Russia is a dominant exporter of palladium (and a large exporter of platinum). In my view, platinum remains extraordinarily cheap compared to palladium and gold, and I continue to look for opportunities to accumulate one- and five-ounce platinum bars at low premiums to melt value.
James Passin is the Executive Chairman of TraceSafe Inc., a company listed on the Canadian Securities Exchange under the symbol TSF. TraceSafe, deployed in mission critical quarantine applications around the world in partnership with leading governments, is a full suite of real-time location management services and contact tracing solutions