Gold 25K plus; A fantasy?
Gold bugs cling to the illusion that they are fighting the system when they buy Gold. However, how do they price their gains? In dollars of course and therein lies the problem. They are indirectly embracing Fiat; they are hoping that Gold will soar in value to 5K or 10K, but when it does they will sell some of that Gold and cash out. They will then use that cash to go and buy things they do not need to impress people they do not like just to be able to prove to them that they now have some money in their pocket to burn. A silly vicious cycle that makes central bankers laugh in glee for their plan was to push everyone to accept this toilet paper as the real deal.
Gold 25K plus: Nothing but a Pipe Dream
On the other side, we have individuals that feel they missed the biggest bull market; we are talking about the Gold bull that topped out in 2011. They live in regret about what could have been when right now we are in the midst of the biggest equities bull market ever. Don’t listen to the stupid naysayers and Dr’s of doom; if they knew anything of value, they would not be screaming on top of their lungs. A wise man does not use fear; he uses reason to make his case. No one can function properly once he or she succumbs to panic; reason goes out the window, and nonsense takes over.
Precious metals will trend higher one day, so why waste time looking at what might or might not happen, when many other markets or sectors are performing remarkably well.
The chart below shows that Gold bugs have had to eat dust for the past five years; the SPX has trounced gold. If you had moved out of Gold and directly invested in an index fund, you would have fared better than leaving your money in Gold. Now imagine you picked a few key, select stocks in sectors that were trending upwards; you would have walked away with massive gains. One example is NTES; another example is AMZN.
Now take a look at the M2 money supply stock chart below; you can clearly see that Gold bugs have taken a beating since 1980. Why do we say beating? Because most of them do not know when to bank their profits; they keep holding out for more assuming that the world is going to end. The only that will end is their finite lives; once again never live in fear, life is short, enjoy it and embrace the trend. Don’t force a trend, because the market loves to teach experts whom they think they can tell the market what it should do that they are nothing but jackasses.
Gold is not trending upwards
If Gold were in an uptrend then as the money supply increased it should have adjusted in value upwards, but as you can see from the above chart that has not been the case. Instead when the Fed cranked the printing press to the maximum Gold topped and broke down. How did the central bankers achieve this miracle? They brainwashed the masses and created a new definition for inflation, that the press and the education system embraced. Moreover, the rest, as they say, was history. Watch Plato’s allegory of the cave; it will help you understand how smart and nefarious central bankers are.
Don’t fall in love with Gold; it is just another investment; it will trend up for some time, then pull back and correct firmly and then trend up again. Nothing trends up forever; the only exception is stupidity. It is a super bull that has not experienced even one correction to date.
Pay no attention to those Gold experts (nutcases) stating that Gold will surge to 25K, 35K or 50K. If Gold ever trades to $50,000, chaos will reign, and nobody in their right mind would want that. Treat these high targets as the ravings of lunatics for that is what they are; these dudes will be dead before Gold trades anywhere close to those targets.
Here is a novel Idea
If you embrace the principles of hard money, then why not use this worthless money to make more money and then convert some of that money to Gold. Indirectly you can have your cake and eat it too. You will be purchasing this Gold with extra worthless paper, otherwise referred to as profit. In essence, you are getting the Gold for free, so you will not be obsessed with the price of Gold as most Gold bugs are. This perspective is lost to the Gold bugs because all they see is Gold and nothing else.
Ignore the Noise and focus on the trend. The trend is your friend everyone, and everything else is your foe.