LISTEN TO GOLD

 

Gold is now at about $4500 per ounce.

To understand whether's it's still a good buy at this price you have to understand what gold is telling us.

To understand gold you have to understand that first and foremost gold is an instability hedge.

People hate this explanation because it can't be easily quantified.  But STABILITY is what makes gold money:

Gold is the only element that is completely inert.  That is to say it is completely stable.  It nevers tarnishes. or rusts or decomposes or alters its fundemental state.  It is stable.  Even when split into ever small quantities.  And in an ever changing world that is indeed a unique charactersitic.

If you go out on the open market you can purchase a Greek Gold Stater of Alexander the Great in mint state.  It will look exactly as it did 2500 years ago.  It will weigh exactly the same. (in lesser condition the gold is still exactly the same but the images engraved on it are degraded.) And, most amazing, it's purchasing power per ounce is quite similar to what it was 2500 years ago.

As everything around changes, gold is the economic constant in our world.  

In 1971 Richard Nixon took that world off the gold standard of money and issued in the age of Debt Financialization.  This has produced a debt binge that has taken the world eonomy to the brink of an epic collapse.

If you listen to Gold.

If you listen to the economic pundits - whose job is to sell you on the health of the economy for economic/political reasons we're on the cusp of a golden age.

If you listen to gold we are about to enter a period of monetary reset during which all of the world's paper/debt currencies will lose most of their purchasing power vis a vis real goods.  In this view, there will be a monetary reset in which Gold will serve as the reserve for a gold/commodity backed settlement currency.

The Central Bankers in China, Russia, India, Viet Nam, Poland, Turkey, Brazil, Uzbekistan, Rumania, Indonesia, Gahna, and others understand this and they are buying gold in unprecedented amounts.  The sovereign wealth funds of Saudi Arabia and Qatar and Kuwait are also investing heavily into bullion gold.  And in the west, several private vaults are now catering to the Billionaire class willing to put at least 20 million into bullion gold.  These vaults are managed by ex fund managers from Black Rock, Morgan Stanley and Goldman Sachs among others,  In other words, investment pros who buy into the viablility of the Eastern view of a Gold-backed currency reset.

It would seem that the world is pretty evenly split right now between Westerners who believe the debt binge can continue for ever and Easterners who believe that Gold is now the ultimate reserve currency.

The Eastern buying binge is driving the gold price ever higher. Most of the gold price move is still caused by Eastern Central Banks but at the margins others are investing in this world view.

They believe the debt binge has reached a critical level of instability.  And they are looking to inflate away their paper/debt in relation to their ever growing gold/money reserve.  

The Western economies seem content to grow their debt indefinitely.  Their new scheme is to use Stable coins platforms to invest in a massive increase in short term US debt.  This is artificial QE on steroids.  If that seems like a great idea maybe buy crypto.

No one can say for sure how this dichotomy will play out in the short run.

But at $4500 per ounce  there's not much time left to protect yourself if you decide the Eastern Central Bank view is worth some of your hard earned currency.