Money Is Cheap, Own Gold

Piling on record historical global debts and holding rates down at 5,000-year lows are likely to stoke inflation like we haven't seen for a long time.

Gold has been sensing this since 2000 but has kicked into high gear once again since late 2019. You've no doubt seen and felt increases in food and pretty much everything else. The Fed says the recent bump in inflation is transitory, but the action in precious metals says otherwise. It's why gold prices are up 42% in just the last two years.

Sustained high inflation, coupled with low nominal interest rates, creates an environment of extended negative real interest rates. And that's when gold thrives. At $1,900, gold is still 9% below its all-time high. But adjusted for inflation, gold is still 26% below its 1980 all-time high.

With money so cheap, record global debt will keep expanding as governments keep spending money they don't have. That coupled with historically low-interest rates and a likely resurgence of money velocity means inflation will rear its ugly head.

It's time to fight back. Own gold.

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