It’s Time to Buy Gold

Very simply put, it’s time to buy gold to preserve your nest egg.

Oh, what do investors do? Stocks have been going up for a decade and the indexes, especially technology and semiconductor chips, look like a ski slope. We are seeing a generation of gamblers push buttons to send risky stocks higher and crypto assets soaring in the hope of getting rich. I have to believe reading an internet post then piling in won’t end well. The joyride certainly is fun while it lasts. Central banks have also joined the party as they print money out of thin air then place bonds and stocks on their balance sheets. Government, corporate, and consumer debt are all at all-time highs with no end in sight, until it ends that is. Over four million million workers quit their jobs in September, putting the quits rate as a percentage of the labor force to 3%, part of what some have called The Great Resignation. The Treasury Auction on Thursday was seen as lousy as many “real” buyers didn’t appear. That’s because the Fed has been buying most of the bonds the last two years. Exponential money printing and stimulus over the past two years means exponential risk. Massive debt since 1971 and now these problems means we are close to the end of the financial system as we know it. Get out before the house of cards falls. Very simply put, it’s time to lighten up on risky assets and buy gold.

The US has the wrong leaders at exactly the wrong time

This week we have an interesting trivia question for our readers. What do Joe Biden, Kamala Harris, Nancy Pelosi, Chuck Schumer, Janet Yellen, Jerome Powell, Elizabeth Warren, Amy Klobuchar, Bernie Sanders, Alexandria Ocasio-Cortez, Pete Buttigieg, Maxine Waters, John Kerry, Beto O’Rourke, Ilhan Omar, Adam Schiff, and Rashida Tlaib all have in common? They are simply the wrong leaders at exactly the wrong time. Everything they do will make the financial situation in our country worse, not to mention having no clue when it comes to anything else. Very simply put, the leaders of our government have absolutely no chance of doing anything positive to get us out of this mess. With all of the issues going on in America, yes this is America, all we hear about is spending, climate control, and critical race theory. If you consider where the markets are now and why, debt, and you consider these people who are calling the shots, it’s time to buy gold to preserve your nest egg.

It’s time to buy gold when you have inflation, shrinkflation, and skimpflation

Inflation by definition is the decline of purchasing power of a given currency over time. A quantitative estimate of the rate at which the decline in purchasing power occurs can be reflected in the increase of an average price level of a basket of selected goods and services in an economy over some time. The rise in the general level of prices, often expressed as a percentage, means that a unit of currency effectively buys less than it did in prior periods. Core CPI came in 0.6% higher in October, hotter than forecasts of 0.4%, and putting it up 4.6% y/y when 4.3% was expected. Non-Core was 0.9% higher, hotter than forecasts of 0.6%, and putting it up 6.2% y/y when 5.8% was expected. Shrinkflation is the practice of reducing the size of a product while maintaining its sticker price. Do you remember when potato chip bags were full of potato chips rather than air? The new term skimpflation describes a slump in service standards amid labor shortage and rising business costs. The services cutbacks of skimpflation are an even bigger headache for consumers, causing longer waits, fewer options, and a general increase in daily inconveniences. With inflation at a 30 year high, skimpflation is piling on the woes for consumers who are already suffering. With inflation, shrinkflation, and skimpflation already ripping up your savings, it’s time to buy gold to preserve your purchasing power.

Paper money eventually returns to its intrinsic value: zero

Back in the 1700s, Voltaire said, Paper money eventually returns to its intrinsic value: zero. Fiat money is a currency that lacks intrinsic value and is established as a legal tender by government regulation. It has value only because a government maintains its value. Fiat money gives central banks greater control over the economy because they can control how much money is printed. Most modern paper currencies, such as the US dollar, are fiat currencies. The value of fiat money depends on supply and demand and was introduced as an alternative to commodity money and representative money. Fiat money is not backed by any physical commodity like silver or gold. As a result, fiat money is based on the creditworthiness of the government. Any fiat currency in history where the government printed money and ran up huge debt failed miserably. To think that can’t happen here in the United States is a very bad assumption to make when it comes to everything you have. If you consider the debt situation here and globally, the trillions more that is coming, the reliance on the central bank, the hurting economy, and the leverage out there that no one really understands and its inevitable destruction, it’s exactly the right time to buy gold to preserve what you have left.

The market warning signs are there. The debt situation is dire. The economy and supply chain is upside down. Our leaders have no clue of what to do in a time of crisis. Let’s review the top ten reasons to own gold. They are just about as basic as simple fundamental principles are. Oh wait, do we have those or use those anymore?

Gold

  1. protects against reckless government officials
  2. protects against financial crisis
  3. requires no specialized expertise
  4. hedges the stock market
  5. is tangible that you hold
  6. is money
  7. has no counterparty risk
  8. is easy to store and transport
  9. is liquid
  10. has always had value

What are you waiting for? When things fall apart, it will be too late to get out of the markets. You and your family’s money will be stuck! Very simply put, it’s time to buy gold or buy more gold to preserve your nest egg.

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