I have been seeing many “experts” expecting gold to tank in price before it finally takes off to catch up with all of the “printing of money” that has taken place over the last 50+ years.

Personally, I believe that these people may be “experts” in looking at history and charts, but they are missing the bigger picture.

I hear most of their explanations that compare today to 2008. Many respected market commentators appear to be making the same mistake.

While it is likely that the takedown in the stock “markets” and freezing up of the credit “markets” may be similar to what we saw in 2008 (probably FAR worse), there has been a MAJOR shift in sentiment that many seem to be ignoring.

In 2008 when we saw credit markets freeze up and the stock market lose over one-third of its value the major beneficiary was the US dollar and US Treasuries. Many of these so-called experts point out that since that is what happened last time it will be the same this time.

My take, based upon what I am seeing, is that the next beatdown will be caused by a collapsing US dollar, excessive “money printing,” to kick the can further down the road, and a collapse in the confidence not just in the US dollar but the USA itself. We are already well on the way.

Already central banks are selling US Treasuries and buying GOLD. Sovereign countries are also selling dollars and treasuries and buying gold. They are also repatriating the gold that has been stored in London and the USA. Big money players are also doing the same.

While those “in charge” are still manipulating the gold and silver prices lower to keep us regular people out of the way while they buy it all- their buying is putting a solid floor under the price and it is highly unlikely that the pullback that many are expecting will be anywhere near as deep as they expect.

While 2008 was a warmup for what we may see soon the more likely comparison would be with 1929 and the great depression. If the money “printers” did not paper over the massive losses in 2008 we would likely have had a couple of very difficult years, but we would be well on our way to, or maybe even experiencing, a sustainable recovery that could last for years. The fact that they did cover the losses and have not stopped “printing” since has led us to a FAR higher cliff to fall from and probably a far longer recovery period.

We are near the end of this run simply because the cure of “printing” that held off a financial collapse of historic proportions has now become the disease. It has caused massive inflation that is likely to get far worse before it gets better. It has caused national debts (personal, corporate, municipal, state, and national debt to get so large that we are “printing” money to buy bonds to keep rates low and even “printing” money to pay interest on what we already owe.

Anyone who has studied economics in any meaningful manner understands that regardless of what the Fed or anyone else calls it- they are monetizing the debt. This means that there is far too much supply (bonds issued to pay off maturing debt, pay interest, soaking up bonds being sold by foreigners, and current deficit spending) so the Fed is conjuring up cash out of nowhere to keep the rates from skyrocketing and causing a financial collapse. This is not a good long-term strategy.

Add to this the fact that commercial real estate is collapsing in many major cities, real estate looks ready to implode along with the economy collapsing and layoffs rising, defaults rising on many loans and credit cards and it is pretty easy to see why many banks don’t appear to be a great place to keep excess cash either.

Basically, trust in the system has never been this low since I have been alive. Most of the things that we just accept as fact like CASH IS KING in a crisis because it has been in the past, will likely prove to be a mistake in the near future.

This appears to me to be the end game where the current system collapses and either war, computer hacking, or some other culprit is named so that those that caused the collapse (money “printers”) escape the blame.

I believe that the outcome of this will be Central Bank Digital Currencies and an attempt to control us all. In the meantime, many will wake up and try to protect themselves with assets held outside of the new system. The #1 choice may be gold. #2 is probably silver for those that cannot afford the gold.

If we look back at 1929-1937, we will see that, as the stock market crashed 90% and took 25 years to get back to that all-time high gold STOCKS went up 525% from 1929-1937. Gold itself went up 75% by government decree.

The comparison to 1929 appears to be right to me. It was the end of a great era of speculation where it seemed so easy to get rich by buying just about any stock. So easy that people took out margin loans to buy more.

Once the selling started those who had margin loans called had to sell which made the selling fiercer and the drawdown of stock prices more severe. Since the currency was kept in check by backing it with gold the money “printing” was a limited option.

Today, most of the “market’s” recent gains are in a few stocks that go up as people buy index funds. Most are bought in 401k plans. What do you think will happen with massive layoffs? Most likely people will sell assets to get by and contributions will dry up. Leverage (margin loans) goose gains on the way up but grease the slide on the way down.

Another problem when rates rise companies will likely not borrow money to buy back shares.

According to Lance Roberts of Real Investment Advice the net flow into US stocks from 2000-2024 was $5.2 TRILLION. Pensions and mutual funds saw an outflow of $2.7 TRILLION. Households and foreign investors added $2.4 TRILLION. Corporate buybacks were $5.5 TRILLION during this time. Without those corporate buybacks the stocks would be 30% LOWER right now and a net OUTFLOW.

In my opinion our 2008 experience was like 1929 with the difference being the ability to “print” unlimited amounts of cash to push the collapse off into the future. With every intervention in the bond and stock “markets” the chasm between PRICE and VALUE gets wider and wider. We can only guess what a fair PRICE would be for most stocks and bonds. My guess is a FAR lower price than many people can imagine.

On the flipside, with every intervention to suppress the prices of hard assets- mainly gold and silver has the exact opposite effect, and many will be stunned to see their true value exposed.

Times are changing fast. Do your own research and …

Be Prepared!

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