HH Outlook For Gold In 2020

Video length: 00:16:28

TRANSCRIPT:

Good afternoon. It is a pleasure to speak at the Empire Club today.

The first time I spoke at the Empire Club was in 2005. I said then that it would not matter to bullion investors if gold ended the year at $400/ounce or $500/ounce, based on the long-term price outcome. Gold ended the year at USD $513.

Gold had a good year in 2019, rising about 18%. Since 2000, gold has averaged 11% annually in the major currencies, with 9.7% in USD and 8.8% in Canadian.

Outlook For Gold in 2020 | Gold in World Currencies Chart

Gold had a good year in 2019, rising about 18%.

According to the OECD, the average annual 15-year pension returns were 6.6% in Canada and 2.6% in the US. You don’t need a complicated algorithm or a computer to conclude that an allocation to gold would have improved returns and reduced volatility. However, other than three global pension funds, none have any gold and most have no allocation to REITs.

Gold vs Pensions Funds Chart

Comparison of North American Pensions vs North American Gold

Yes, today, investors are euphoric and financial markets have set historic highs regularly, but they are highly overvalued by every conventional measure. This year, I promise my annual offering of doom and gloom, but I would also like to offer a contrarian strategy for protecting against losses, and even profiting during the inevitable market correction.

This is the first time during the 40 years I have been in business that a simultaneous triple bubble in equities, bonds and real estate has occurred. There is a direct correlation to the amount of liquidity central banks are injecting into the system on a daily basis and these inflated asset prices.

To quote David Stockman on this topic:

David Stockman Quote

Quote by David Stockman, American politician and former businessman who was a Republican U.S. Representative from the state of Michigan and the Director of the Office of Management and Budget under President Ronald Reagan.

“Now we have the greatest mother of all bubbles. And there’s nobody left in the stock market today except drugged-up day traders and robots who are being mainlined by the daily injections of liquidity from the Fed. This is utterly irrational.”

(Click on image to enlarge)

S&P 500 Displays The Looming Triple Bubble Chart

Many economists and financial analysts believe the next correction will be worse than 2008, and some think worse than 1929.

Many economists and financial analysts believe the next correction will be worse than 2008, and some think it will be worse than 1929. In 2008, the total US debt was $8 trillion; today it is $23 trillion.

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