Gold Climbing The Wall Of Worry

But the cheerleaders say “there is nothing to worry about.” The cheerleaders might claim:

  • The Fed will “print” more dollars and support the stock market. Probably, but after how much carnage?
  • The “borrow and spend” scam has worked for over a century and they claim it will survive even if national debt reaches $500 trillion. That Ford F-150 truck that costs $50,000 now will cost far more when debt has gone multiples higher.
  • The U.S. dollar is the world’s reserve currency. We’ll print more, so why worry about gold and silver insurance? Then why are Russia, China, India and others buying so much gold?
  • Fort Knox is full of gold—over 8,000 tons of the stuff—if you trust the pronouncements from politicians, the Fed, and Treasury officials. But, the Pentagon spends the equivalent of the Fort Knox gold every few months. Gold is inexpensive and spending is “out of control.” This will correct, consequences will be ugly for most Americans, and gold will rally much higher.
  • Wall Street cheerleaders discourage physical gold ownership. They like paper investments that provide a revenue stream to Wall Street. Those paper investments had a long run, but the cycle has rolled over.


Bitcoin and other cryptocurrencies? Maybe not!

Gold, silver, commodities and crude oil? Commodities have been weak for years and should rise, but a recession or worse will reduce demand. Crude oil has fallen 40% since a short-term high in October. However, gold has risen since August.

Examine the Thomas/Reuters Commodity Index times 10 divided by the S&P 500 Index.

The ratio has fallen to its lowest level in two decades. Longer term charts show similar undervaluation of commodities and over-valuation of the S&P 500 Index. Expect reversals.

Crude oil rises and falls based on supply, demand, and politics. Examine the ratio of crude oil to the S&P 500 Index. The ratio has fallen almost to its late 1990s low and has turned upward.

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Miles Franklin sells silver. Call them at 1-800-822-8080 and tell them you agree with the Deviant Investor about silver.

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