Something is happening with gold, and it isn’t just against the dollar as it is all strong and muscly in multi-currency terms. Yes, you could make the case for the “banking crisis” being the reason why gold has popped up over the last month. However, gold has been etching higher over the last six months in dollar terms and longer in other currencies.
Gold in SGD, AUD, EUR, CNH, JPY indexed to 100 – year-to-date
And it seems to have been working off an overbought condition over the last couple of years. If this was a flash in the pan thing for gold, it should have given back all its gains of 2020 on the back of Covid (as the Nasdaq has). Also note gold was already moving higher in 2019 way before Covid.
So it would seem to us that the COVID scam and the recent banking crisis/circus is just “fleas on a dog’s back” for gold — there is something “systemic” going on. The lack of trust on a global scale is revealing itself in gold.
We have a strong conviction that this is the tip of the iceberg (i.e. the upside of gold in multi-currency terms is a long way from being done).
Long term it would seem that the odds are in favor of gold outperforming the world stock market.
I know there is a lot to take in, and I’m going to show you yet another chart, but this is truly revealing.
Gold in SGD, AUD, EUR, CNH, JPY indexed to 100 – last 20 years
This takes us back to 2000 — 20-odd years ago. Multi currencies against the yellow metal indexed to zero. Is this not monetary debasement in a simple picture?
Obviously, it depends on where you take your time period from, but from 1990 the world stock market is up some 380% whereas gold is up 450%. So it could be argued that all the gains in the world stock market have been on the back of monetary debasement.
There is one key thing we left out in the chart above — the effect of compounding dividends. If we include dividends and assume they are reinvested, then the return of the world stock market goes to 710%, but around half of those returns are accounted for by monetary debasement.
Our thinking is that, longer-term (a 10-year view), holding a “whack” of your money in gold (physical or an ETF) in preference to the general equity market (or other growth orientated ETFs) isn’t a stupid idea and is actually a no brainer.
Are we on the verge of massive outperformance of gold relative to the S&P? Like the 1970s or even from 2000 to 2013? Well, stranger things have happened. Note that when gold gets going, the trends tend not to last for just a couple of years but rather 10 years at least.
Here is where things are far from being a no-brainer… What is going to outperform over the next 10 years or so? Gold or gold miners?
From 1983 to 2008, gold and gold miners tracked each other reasonably well. Then, from mid-2008 (the onset of the GFC), something happened and gold has outperformed miners dramatically. Sorry, but 1983 is as far back as the XAU (Philadelphia Gold Miners Index) goes.
Gold miners (XAU) and gold spot indexed to 1 as of 1983
Zooming into the period from mid-2008 until present, we can see in the chart below that gold miners have underperformed gold by some 70%, although they have moved in lockstep since the start of 2015 (eight years).
What is the reason for this underperformance?
Some say it is because of the increase in costs from energy. Yet, from 2008 until present, crude (a good proxy for diesel prices) has gone down relative to gold.
The contrarian in us suggests that we are approaching a time for gold miners to outperform gold. But we are lacking a fundamental reason for that genius idea.
Stacking up relative to the S&P 500 we can see in the chart below that the gold miners have performed more or less in line with the S&P 500 since the start of 2015.
And gold miners are as out of favor as they were during the height of the TMT/dot-com bubble of 2000.
Coffee the Christian way: Promised Grounds
In a nutshell:
- We don’t think it is going to be difficult to outperform the S&P 500 with a basket of gold miners over the next 10 years
- Whether or not you would be better off investing in gold miners or gold, toss a coin… or go 50/50 GDX and GLD — Newmont and Krugerrand or whatever tickles your fancy.
What else?
Is gold foretelling us of an impending monetary crisis?
Well, we do know one’s coming so…
Editor’s Note: The Western system is undergoing substantial changes, and the signs of moral decay, corruption, and increasing debt are impossible to ignore. With the Great Reset in motion, the United Nations, World Economic Forum, IMF, WHO, World Bank, and Davos man are all promoting a unified agenda that will affect us all.
To get ahead of the chaos, download our free PDF report “Clash of the Systems: Thoughts on Investing at a Unique Point in Time” by clicking here. Article cross-posted from International Man.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
When you need to buy a loaf of bread or a can of beans, who’s gonna have change for a 2k gold piece?
When TSHTF, don’t put it past them to go for your guns – and your gold.
What will you do when conditions have stabilzed – trade it in for digital currency?
What if the powers that be do a Roosevelt and order you to turn it all in?
A gold IRA will be worth less than the paper it’s printed on when the collapse occurs.