Costco selling gold bars, sells out within hours
Gresham's Law beginning to surface among US consumers
(KTLA) – One of Costco’s newest merchandise items has been selling out within a matter of hours, CFO Richard Galanti said on an earnings call Tuesday.
“I’ve gotten a couple of calls that people have seen that we’ve been selling one-ounce gold bars,” Galanti told investors during the fourth-quarter earnings call. “Yes, but when we load them on the site, they’re gone within a few hours and we limit two per member.”
As we wrote Monday, Gresham’s Law — that bad money pushes out good — is about to rear its ugly head as the US Dollar’s role as superior money loses confidence, and market participants rediscover better alternatives.
It’s not that the dollar will disappear suddenly; its use in transactions increases at first, while other forms of money (gold, silver and Bitcoin) are hoarded.
The equation is MV = PQ
Where M is quantity of money, V is Velocity of money, Q is the quantity of goods sold, and P is the price level. Once Gresham’s Law takes effect, price increases do not require the Fed to create new money at the rate previously. Velocity alone (people dumping dollars for gold bars and canned beans at Costco) does the rest.
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