WHY CAN"T GOLD TAKE OFF?

 

With stagflation taking hold of the global economy; with a global pandemic, with domestic terror becoming part of the platform of one of Amerca's two major political parties, with Democracy threatened across the globe, with  wildfire, drought and hurricanes threatening the global food supply, Gold is still languishing in a trading range betweeon $1600 and $2000.  

WHY?

Has there ever been this much uncertainty built into the fabric of everyday life?

The reason, though is simple.  Despite all the massive suspicion and in many quarters hatred of government, of the press, of our political institutions (often fomented by officials of the same government,)  there is still a thorough respect for the Central Banking System.

There is a certainty that the Fed and ECB will coordinate in all circumstances in a way that will protect the financial markets so that they will ever and always continue to rise.

The stock market will go up forever.  The bond markets will continue to be liquid forever.  The wealthy will always get richer and richer.

So who needs the portfolio protection that is gold?

Nobody,

As long as the Central Banking system is secure.

They bailed out the Long Term Capital Management crisis with a trillion dollars.

They bailed out the sub prime crisis with 3 trillion dollars.

They bailed out the Covid Liquidity Crisis with 10 trillion dollars.

How much will they throw at the next crisis?  30 trillion dollars?  50 trillion dollars?

HERE IS THE QUESTION: At what point will the creation of bailout money create its own instability that will rival the crisis it is baling out?

That's the point at which gold and silver will take off.  And at that point it will become impossible to get gold and silver except at ever higher prices.  When it takes off it will move very quickly and very high.  Might be better to have some now.