Article originally appeared on ZeroHedge (HERE)
– Why it’s time to get into gold
– We’re on the cusp of “huge changes in the world”
– “Massive impact on the price of the most enduring investment in history: GOLD”
– “A gold shock is coming” and “$10k gold is not out of the question”
If you know your history, you will know that gold can do tremendously well when “worry money” is looking urgently for a new home.
We are on the cusp of a big move and it could represent the single best investment decision you will make over the coming decade.
The first reason you should be interested in gold is it is out of favour.
As a tech investor, the names of big-name tech companies like Amazon, Apple and Netflix are on the lips of everyone I meet. I was reminded of that fact at passport control coming back from a speaking tour of Australia last year. When the border control officer heard what I do for a living, the first question he asked was whether I thought Apple or Amazon would get to a $1 trillion market cap first.
That is a testament to just how popular these mega-cap tech stocks are right now. It also means a lot of value has already been priced in. By comparison gold is unpopular because it hasn’t gone anywhere in years. It is usually when assets are neglected by investors that they become interesting from a value perspective.
The second reason is gold is an uncorrelated asset
That means it doesn’t tend to move in tandem with either stocks or bonds and therefore having some in your portfolio offers diversification which is not easily attained from other asset classes.
The third reason is gold is the original money
Central banks continue to stockpile it and it is prized as a store of value in almost every country in the world. If we accept the premise that gold is a monetary metal, then like any currency its price will fluctuate relative to other currencies. Just as it makes no sense to say the value of the pound without talking about its value relative to another currency, the same goes for gold.
The fourth reason is gold is a physical asset whose supply cannot easily be increased
That gives it particularly attractive characteristics from an investment perspective. That is doubly so when governments are intent on debasing their own currencies.
There is also the simple fact that it is pretty. I’ll never forget a Chinese client of mine relating how he loves the feel of his gold; how reassuringly heavy it is and how it warms up in his hand. There will always be demand for gold as a bauble or jewelry, on top of its investment allure.
None of these reasons are new.
What is new is the evolving geopolitical environment, the long-term debt cycle and the financials of gold miners which are the only sources of new supply.
A storm is brewing
Social democracy is failing.
Populist regimes are springing up all over the world. These were originally considered fringe movements but are increasingly mainstream because people are angry and want an alternative to the status quo.
The simple question that people are asking when they vote for populists is “What about me?” The answer, regardless of whether that administration is left or right leaning, is “Here, have some money.”
Fiscal stimulus is growing in popularity all over the world because quantitative easing (QE) just does not deliver the kind of economic growth everyone was hoping for.
To get into power populist leaders will make big, unrealistic promises. Promises they can only hope to fulfil by printing money.
As fiat currencies are burned on a pier of populism, gold really comes into its own for the simple reason you cannot print gold into existence.
I know that sounds trite, but when the whole world is centred on debt and financed on promises, there is a very clear reason to have an interest in an asset which is no one’s liability. Gold simply is that asset.
And there is another major catalyst for gold looming…
The China Trigger
If that is a picture of the mood in Europe and North America which have been denuded of manufacturing then the beneficiaries of globalisation, such as China, are going to do whatever they can to protect themselves and their interests. We are seeing Asian countries, including China, stockpiling physical gold.
They see a time coming when having hold-in-your-hand gold will be incredibly important when it comes to preserving wealth. In this scenario, gold miners look incredibly attractive.
Nationalism is rising there too and China is building aircraft carries as well as a daisy chain of military bases between itself and the Persian Gulf under the guise of the Belt and Road programme.
Make no mistake, we haven’t even seen the beginning of geopolitical uncertainty and historically that has been favourable for gold.
Taking in all of the above, we are looking at a rare and exciting time to start investing in gold. In this scenario, $10k gold is not out of the question.
If everything falls into place… I would not be surprised to see that price at all.
So, the question is: how do we maximise this expected gold boom?
That and the best ways to buy gold that everyone can afford might be in an unexpected amount. By the gram.
A major gold bull is coming.
I have no doubt about it.
And the experts I trust the most are all coming to this same conclusion.
But what I think will shock almost everyone is just how high the gold price could go.
Watch these top trending RTD videos to get the real scoop. (100k+ YouTube Views)
1) (We Are In A National Crisis) Did You Hear What Trump Said?
2) Trump And A New Gold-Backed Dollar
3. RTD Ep:69 “A Reset Of All The Global Fiat Currencies Against Gold” – Kevin Massengill