Gold had a huge breakout this past week, building upon the initial breakout at the beginning of March 2024.
What does it mean? What are the implications?
In this episode of Finance U Paul Kiker and I discuss the fact that the West seems to have lost its multi-decade-long iron grip on the price of gold, the connection of that to the US’s ill-advised decision to seize Russia’s sovereign reserves on Feb 28th, 2022, and the increasingly strong possibility that the BRICs will use some form of gold-backing to replace a weaponized US dollar.
Oh, and silver seems to be joining the party now too. And oil. This is the sort of party the Fed really doesn’t want to get started, but it’s caught in a bind at the moment.
Fun times, fun times.
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Well, IF the blob is doing something to cause the gold spike like making other countries afraid that the blob will punish them for not eating the blob approved flavor of ice cream, I think the price can only go up because the blob NEVER does anything but double down. Can you say Ukraine?
Interesting point that you guys brought up during this video, that it is meaningful to be better off than others around you. I think that is true but i can’t for the life of me figure out why. I guess more options. Is it actually beneficial to be the richest serf or do you attract the stasi? What do others think?
@cmartenson Unreasonably LONG - glad to hear at least one more in my boat - sure love the very meaningful increases in the last week ;). $1 increases in silver an
d $100 increases in gold are huge with Unreasonably Long
I had the same thought until I did the math on how much it would take to take care of 10 people for even 6 months. In Aesop’s Fables the ant turns the grasshopper away to die in the winter, because the ant can’t afford the supplies to keep his family and the grasshopper alive for the winter. I’m already not impressed with the people I’ve tried to wake up, who refuse to pull their head out of the sand. I can’t imagine I’ll be happy to see them when they come around with their hands out. I think people need to bring something to the table, and so many people these days are so highly specialized in their work I’m pretty sure most people don’t bring much at all. The County Weed and Pest guy has been having trouble finding temp summer help. He told me he hired a kid just out of high school last summer, and the kid had to be trained to change the oil in a 5hp B&S engine they use for spraying. Then he felt like he had to supervise him when it needed to be changed again. We’re facing a serious competency crisis in the West caused largely by iPhone parents allowing their kids to do nothing but play video games all day. Who do you help, since you can’t help everybody?
Edit: I hadn’t read any of Aesop’s Fables in over a decade so I went to reread The Ant and the Grasshopper. Well to my surprise the Ant now invites the lazy Grasshopper into his nest to feed him. The Ant and the Grasshopper (Aesop’s Fables) | Campfire Marshmallows A sign of the times I suppose.
I had lunch with my two young bible-based pastors today and I do believe they would strongly say they are not responsible for others they are responsible for their families. That does not mean they /I would not help others BUT I do not see it as my responsibility to give my food , precious metals water land away because someone else failed to prepare. they schooled me today on God has given us all the opportunity to see truth it is our choice to seek it or not. Thus, he does not send anyone to hell we send ourselves there - if that is where we end up :). So @jsmithtx if i read your words right i am not sure I agree. I am blessed and seek to be a greater blessing to others but that may not mean giving all my stuff way . I see being example in my prepping and willingness to show others and answer questions about the different forms of capital. As Ann Vender Steel said on Chris’s interview with her we are going to have to leave some people behind as we move forward while preparing to lead our families for the shit storm that awaits us
An alternative we practice is to keep a strategic supply of give away food stuffs. They can afford some negotiating leverage and allow for setting terms up to never come back after this. Stuff like Top Ramen could potentially be an inexpensixe ice breaker and provide some psychological leverage to move on.
You keep asking why is gold going up? Yet i think you have touched on all the relevant reasons. In addition is the fact that the East seems to be
“Doubling Down” to reverse the manipulation of “The Plunge Protection Team”. There also seems to some call options in the future market to hedge on the heightened demand from central banks.
Tonsummarise the other 9 points:
Weaponising the US dollar
US dollar devaluation
Inflation hedging
World wide CB acquisitions of gold.
Decrease in the supposed real interest rates
Shielding from spikes in US debt levels
Countries protecting their foreign reserves against devaluation
Geopolitical tensions
De-dollarisation
It always amuses me as to why one would constantly walk into the “Wall Street Casino” of illusionary fait money and stock values.
As mentioned before, sources in the gold market estimated that China has possibly between 23-25,000 tons of gold and that the public has another 23,000 tons. In my mind one does not need to speculate. It would be against thier interest to drop the “atomic bomb” on the fait world currency market at this time. They already have CDC and renumeration of thier currency against gold. The Chinese people are more or less content and obedient. Surrendering thier gold would not be hard. Let us also not forget the cultural and psychological Eastern World connection to gold.
The only big question i have is why the CBs of the world increased gold holdings?
For so many decades i have always insisted that the major emphasis has to be the P in GDP. The strength of a country lies squarely in the production of goods for consumption and export. And the strength of the currency rests on the balance of trade.
I’ve been unreasonably long for over 20 years as well.
Was speaking to a relatively sophisticated person recently and mentioned that I had been unreasonably long Au for a long time and his response was a snarky “so how has that worked out for you?” I said, “well, it’s been compounding at an average of 8.5% (AUD)” there was a flicker of shock that ran across his face. It didn’t fit with how he thought about gold. We then had an interesting discussion about real inflation.
Now, I might have done a little better in property over the same time frame, or the stock market with exceptional timing, but 8.5% compounding is solid in my opinion.
I’m of the opinion that Gold’s behavior is simple to understand:
The can has reached the end of the road and all the things we have “known” to be true for the last decade are fully manifesting. It’s the beginning of the end. Imperial collapse.
The previous savagely epic metals beat downs have turned into giving a the meanest look event. Even though we vested a long time ago and and somewhat disinterested in short term fluctuations, I used to cringe when prices spiked knowing the angry paper market bully husband was soon to give his hard asset wife a proper pricing attitude beating. Mrs. GOLD is semingly carring a .357 magmum these days.
