Can Gold Save Latin America from Hyperinflation? 

This episode of ‘Live from the Vault’ focuses on the issue of rapidly increasing inflation in Latin America and neighboring regions. Industry leaders from leading Panama-based vaulting provider, the Atlas Group, enlighten Andrew Maguire on the global scale of the problem. The trio contemplates existing solutions that could counteract currency erosion across the globe.

Hyperinflation in Latin America

The Latin American economic landscape has long been used as an international example of financial instability. However, the Covid-19 pandemic has deepened the crisis even further with inflation skyrocketing regionwide. Currently, a staggering 300 million of the 700 million people in the region live below the poverty line. With the 10% GDP deficit annually, 50% inflation in Argentina and almost 500% in Venezuela, the result is a significant erosion of Latin American citizens’ wealth.

As we’ve seen globally, the government’s response to extreme inflationary conditions is further money printing. If history has shown us anything, unrestricted increases in money supply will only worsen this financial depression.

The Stabilising Force of Gold and Silver

The solution outlined by Atlas Group’s experts lies in providing Latin American citizens with access to largely inflation-proof physical assets, such as physical gold and silver. A solution could be presented in the form of gold-backed digital currency. With technological advancements making ‘digital gold’ spendable, such currency holds the potential to deliver a true store of value to the people of Latin America.

As Carlos alfredo Lao, the General Manager of the Atlas Group says:

“You have to find the things that are going to be under your control, things that don’t evaporate. That’s key and I think that’s going to open up opportunities for people (…) and give them individual freedom.”

What is the future of money in Latin America? As more paper money is continuously printed, the citizens are braced for yet another inflationary spiral. The solution may lie in a stable store of value that has survived even history’s greatest tests.

Jai Bifulco, Chief Commercial Officer, Kinesis Money