The remarkable post-World War II stability is coming to an end
The only certainty in a world being turned upside down, in fact, is uncertainty.
We would like to bring to your attention the results of an intriguing study posted at Bloomberg under the title, An Economist’s Guide to the World in 2050. In it, economists Tom Orlik and Bjorn van Roye offer a close look at the ongoing transition of wealth and power from West to East and assess what it might mean for the United States and American investors. Their statistical study maps “some of the key geographic and political shifts in store for the world economy” in the years to come. “The results,” they say, “suggest that a remarkable period of stability, stretching from the end of World War II through to the early 21st century, is coming to an end.” We would add that just as wealth and power have moved West to East, so has a large portion of the world’s physical gold, particularly since the beginnings of the global financial crisis in 2008. (Please see chart below on Chinese gold accumulation.)
Orlik and van Roye begin with a question: “Who won the Cold War?” And answer immediately: “Maybe China.” They say that rather than being at the end of history as some thought following the end of the Cold War, we are really nearer the beginning. The world, they say, “is in the midst of a messy transition as the balance of economic and political power shifts from West to East, from free markets to the state and from democracies to authoritarianism and populism. … The transition is already upending global politics, economics and markets.”
We recommend spending a few minutes to read this article. If you come away, as we did, with the impression that the study’s findings serve as a wake-up call, then you might want to make certain that your portfolio is sufficiently hedged to weather the possible uncertainties ahead. The only certainty in a world being turned upside down, in fact, is uncertainty. As we have been so rudely reminded over the course of the past year, we are all being carried on the long wave of history – destination unknown.
Bridging the ‘Fourth Turning’ with Gold It began in 2008. It is scheduled to end in 2028.
What happens between now and then?
“The fourth turning, is the final season of history, if you will, the final generation. And that is the period of crisis. That is the period when we tear down institutions that we’ve built, everything that’s dysfunctional. And we sort of rebuild things from scratch again. And it usually follows a period where – it’s bound up in a period – where there’s complete disgust, complete distrust with what we have.” – Neil Howe, co-author The Fourth Turning (from a MacroVoices interview, August 2017)
We first published this article in October 2018. It is as relevant today as it was then though the message has taken on a greater degree of urgency after the events of the past year. A link to the full MacroVoices interview is included with the article.
The Precious Metals Safe Storage Advantage The logical alternative to gold and silver ETFs for the safety-minded investor
It only takes a few minutes to complete a Precious Metals Safe Storage account opening form, but it could mean all the difference for the investor seeking a superior alternative to gold and silver ETFs. We use the word “superior” because depository storage accounts come with an option not readily available in most ETF accounts – You can take delivery of the metal in your account, or any portion of it, whenever you wish. And you can include gold bullion coins, historic fractional gold coins, U.S. $20 gold pieces, silver bullion coins, bars – in other words, the range of gold and silver investment products available at USAGOLD.
At the same time, given the exclusive preferred referral storage rate you receive by opening your storage account through USAGOLD, the annual cost to maintain your holdings is comparable (and often lower) to what most ETF vendors charge in annual fees. All the while, your metal is stored safely and fully insured in an allocated account at one of America’s oldest, largest and highly respected independent depositories – a firm with which we personally have done business for decades. To get started, we invite you to go to the link immediately below and fill out the application.
This approach is especially well suited for those who want to take a strong position in silver and avoid the logistics and storage problems that often accompany it.
A telephone call from an old client and friend ‘Gold shone with the placid certainty of received tradition’
“I had the happy occasion recently of receiving a telephone call from an old client and friend – a physician safely retired near the sea and alongside one of the South’s oldest golf clubs. It was good to hear from this student of the markets – one of life’s steady and thoughtful practitioners. Back at the turn of the century, Doc foresaw much of what would happen economically in the United States and purchased what he considered enough gold to see him through it.”
NEWS &VIEWS Forecasts, Commentary & Analysis on the Economy and Precious Metals Celebrating our 46th year in the gold business
Hedging the decline and fall of a currency
The baseline case for gold hasn’t changed much in 1700 years
“We sometimes forget that inflation is a process rather than an event. One of the better-known examples of that axiom is the nearly two centuries-long debasement of Rome’s silver denarius – an inflationary episode Jack Whyte, a writer of historical fiction, skillfully addresses in his latest novel, The Burning Stone …… Over the long run, gold in the modern era has maintained its purchasing power as it did in Roman times, while the dollar, like the denarius, has been steadily debased. So it is by the circuitous route just taken, you now know how Jack Whyte’s depiction of the Roman inflation in The Burning Stone reinforces the argument for gold ownership today. It also explains why we went to the trouble of presenting a review of this intriguing book in our monthly newsletter.”
Open access! We think you will appreciate this timeless
News & View Special Report given recent events.
If you think you could benefit from a concise review of the latest news, analysis and opinion on the gold market from a variety of expert sources, then News & Views is the newsletter for you. Since the early 1990s, we have offered it free-of-charge as a monthly service to our regular clientele and as an incentive to prospective clients at no obligation. By subscribing, you will automatically receive future editions and occasional in-depth Special Reports by e-mail.
BlackSwansYellowGold How gold performs during periods of deflation,
disinflation, stagflation and hyperinflation
“That men do not learn very much from the lessons of history is
the most important of all the lessons of history.” –– Aldous Huxley ––
Though Huxley’s observation is readily applied to humanity collectively, it does not apply so easily to individual investors. As justification, we offer the ongoing (and long-term) success of the USAGOLD website as well as the soaring statistics on the growth of private gold ownership over the past decade both in the United States and abroad, inspired directly by the lessons learned from financial market upheaval. The following short essays are dedicated to the safe-haven gold investor who, like noted financial author Nicholas Taleb, believes that it is just as important to prepare for what we cannot foresee as what we can.
The Power of Gold Diversification “Although it is needed in good times, it can be vital when times are difficult.”
This short article begins with reference to a speech by Sir Peter Tapsell on the merits of gold ownership before the House of Commons in 1999. The occasion was Britain’s proposed sale of over half of its gold reserves at under $300 per ounce. It ends by comparing the performance of two investment portfolios from the time of that speech to present. One portfolio – the more successful of the two – included a diversification with gold; the other did not. Sir Tapsell, who passed away in 2018, lived to see his defense of gold vindicated. Though his argument before the House of Commons failed to stop the sales, it goes down as one of the most eloquent appeals ever made on the merits of gold ownership for nation-states and individuals alike.
Money and politics in the land of Oz The extraordinary story behind the extraordinary story of
“The Wonderful Wizard of Oz”
by Professor Quentin Taylor, Rogers State University
Year in, year out, Money and politics in the land of Oz is among our most highly-visited Gold Classics Library selections. Here is the extraordinary story behind the extraordinary story of ‘The Wonderful Wizard of Oz’. Most have seen the movie version of this allegorical tale published in 1900, an election year, but few are aware of what the various characters, places and things represented in the mind of Frank Baum, the tale’s author. Though ‘The Wonderful Wizard of Oz’ was written 120 years ago, the themes will be recognizable to those with an interest in golden matters today. While many today consider gold an instrument of financial and personal freedom, in Baum’s tale, it is painted as a villain — the tool of oppression. So, as you are about to see, we have come full circle, and gold has traveled a yellow brick road of its own.
– USAGOLD’s widely acclaimed monthly client letter –
NEWS &VIEWS Forecasts, Commentary and Analysis on the Economy and Precious Metals
The contemporary, web-based version of our client letter traces its beginnings to the early 1990s as a hard-copy newsletter mailed to our clientele. Its principal objectives have always been the same – to keep our clients informed on important developments in the gold market, condense the available gold-based news and opinion into a brief, readable digest, and to counter the traditional anti-gold bias in the mainstream media. That formula has won it a five-figure subscription base. In addition to our regular newsletters, we occasionally publish in-depth special reports that focus on events and developments of interest to gold owners. Valued for their insight, accuracy and reliability, our publications are linked and reprinted by a large number of websites both in the United States and around the globe.
Though rarely discussed, gold ownership has as much to do with personal philosophy and how we wish to conduct our lives as it does finance and economics. In many ways, it is a rational portfolio decision that suits the times, but it is also a lifestyle decision that provides some peace of mind no matter what happens with the pandemic, the latest mania on Wall Street, or the election-year machinations in Washington D.C. As Richard Russell, the now-deceased editor of the Dow Theory Letters once put it, “I still sleep better at night knowing that I hold some gold. If or when everything else falls apart, gold will still be unquestioned wealth.”
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Prospective clients welcome!
Negative interest rates are a reality in both the European Union and Japan. Alan Greenspan recently said that it is “only a matter of time” before they spread to the United States. One of the arguments against gold over the years has been that it costs money to own it. Now it costs money to own euros and yen, and before too long it might cost money to own the dollar as well. “One of the reasons,” Greenspan added in that same CNBC interview, “the gold price is rising as fast as it is – you know, at $1500 a troy ounce. … What that is telling us is that people are looking for resources they know are going to have a value 20 years from now, or 30 years from now, as they age and they want to make sure they have the resources to keep themselves in place.”
The advent of negative rates is perhaps one of the more profound differences between this gold rally and rallies in the past. It might also prove to be the most enduring. If you have an interest in hedging your IRA with precious metals, we can help.
Toward a better understanding
of the U.S. national debt . . .
and its consequences
“As of Friday, April 12, 2019, the national debt stood at $22,027,837,127,788.04* – $966 billion higher than a year ago, $2.081 trillion higher than when Donald Trump took office January 20, 2017, and nearly double where it was ten years ago. It is no doubt much higher now than it was then as that is the nature of the national debt. It always grows. It never shrinks. And that has consequences for the country and for you as an investor.”
NEWS & VIEWS Forecasts, Commentary & Analysis on the Economy and Precious Metals
If you think you could benefit from a concise review of the latest news, analysis, and opinion on the gold market from a variety of expert sources, then News & Views is the newsletter for you. Since the early 1990s, we have offered it free-of-charge as a monthly service to our regular clientele and as an incentive to prospective clients. By subscribing, you will automatically receive future editions and occasional in-depth Special Reports by e-mail.
In the third edition of The ABCs of Gold Investing, I make reference to the landmark book, This Time Is Different – Eight Centuries of Financial Folly by Ken Rogoff and Carmen Reinhart with the following observation:
“In a later interview with the Financial Times [early 2012], Kenneth Rogoff reveals that ‘one of the reasons that Carmen Reinhart and I hit it off, is that we are both incredibly cynical about governments.’ Though I cannot vouch for the contents of Mr. Rogoff’s investment portfolio, such cynicism, it has been my experience, more often than not beats a path to gold’s door. Reinhart and Rogoff end the preface to the book with this prediction: ‘Unfortunately even before the ink is dry on this book, the answer will be clear enough. We hope that the weight of evidence in this book will give future policy-makers and investors a bit more pause before next they declare, ‘This time is different.’ It almost never is.”
Dr. Rogoff, as you are about to read, does indeed have a soft spot for gold and for the right reasons. MK
Gold’s Century While stocks dominated headlines, gold quietly performed by Michael J. Kosares
Over the last nearly two decades, gold has been in a secular bull market. Many believe that we are now on the verge of a second leg in its ascent. This article reveals nine little known and surprising facts about gold’s price performance since 2001 and tells why we are living in gold’s century, not the stock market’s.