RE: Gold eagle article13 Apr 2020 13:12
Thanks for the article, T. It's always worth reading a large swathe of material so you get a diverse spread of opinion. This article, however, does not change my very bullish stance on PMs & the mining community.
Over recent weeks we have seen currency creation on a scale that few could've imagined. The Fed, for example, printed a FURTHER $2.3T last week alone.....& I don't believe for one minute that we're done with this, either. And this newly created currency is not going to go away. The Fed's recent (failed) attempt at QT has shown us that it is impossible to contract the monetary base without causing a recession / depression.
At the same time as we're seeing record currency creation, we also have much of the world's productive capacity shut-down. Whilst we're often told that fiat currencies aren't backed by anything, that's not entirely true....they're backed by the (future) capacity of an economy to create things of value (GDP). In the current climate, an asset-backed currency supported by gold would actually have RISEN in value (note: I'm NOT advocating a return to the gold standard, just using it as an example). Instead, we have fiat currencies around the world backed only by GDP which (for the last month AT LEAST) will be virtually nil & may well be so for some time to come. Quite how fiat currencies around the world haven't fallen circa 30% is really quite beyond me.
There is no example...NOT ONE...in all of the 1,000 year history of paper money, of a fiat currency holding its value. Anyone who thinks "it's different this time" needs to demonstrate, plausibly, exactly why they believe it IS different before they continue to hold fiat. Assuming, of course, that they cannot do so, they need to position themselves in PMs & related investments.
I'm not preaching to you: you're a holder here so I'm assuming you already know all of this which is exactly why you're invested; I'm just making the counter argument against the article. Could we see a pull-back? Yes: I suggest we will. But a pull-back to $1350???? Not a chance in Hell. Gold spent around 7 years in a fairly tight trading range, with $1350 being a very well-defined ceiling. Ask yourself: is the economy in a better place now than it was then? Did we have a global pandemic back then like we do now? Are countries producing more, or less, now than they were then? Just how much have global currencies been debased in the last 6 months alone????
No...gold is nowhere near its true value. And it will find it by looking upwards. Way...way upwards.
The world is in a mess. Markets even more so. Just last week I grabbed a screen-shot of CNBC when they had two different headlines on the screen at the same time. Do you know what they were?
1) Over 16M Americans file unemployment claims in just 3 weeks.
&
2) Dow Jones has its best week since 1938.
How f'd up is that???
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