Gold nosedived this morning… Financial reporters are calling it a “flash crash.” Take a look… Gold trades around the world. And as markets opened in Asia today, it plunged as much as 4.5%. Then, mostly before markets opened in Europe, it bounced 3.5%. As I (Chris Lowe) type, it’s up 2.3% from its flash-crash lows. We don’t spend too much time thinking about short-term gyrations like this… or the technical reasons they happen. But the long-term picture for gold is also troubling… Even with the recovery, gold is down 15% over the past 12 months. And it’s down 16% since its all-time high of $2,063 in July of last year. So today, we’ll look at why gold has been doing so poorly. And I’ll show you why it’s still worth holding as a special type of portfolio protection. First, a warm welcome to new readers… Each week, thousands of people subscribe to one of the 20 paid investment advisories we put out at Legacy Research. It’s the publishing alliance behind Teeka Tiwari, Jeff Brown, Dave Forest, and Jason Bodner. Our mission at the Cut is to make sure you never miss one of their big moneymaking, or wealth-protection, ideas. I don’t mean the kind of ideas you come across on CNBC or in The Wall Street Journal. At Legacy, we don’t do mainstream. We believe the best opportunities are found in the disconnect between the mainstream narrative and what’s really going on. | Recommended Link | Tomorrow at 1pm ET, for the first time ever… We're giving the stage to a Wall Street living legend, who will make the biggest announcement of his 50-year career... the unveiling of a new type of company that could make you 5 to 10 times your money. "It'll change the way you eat, shop, work, and more. A once-in-a-generation investment opportunity," he says. | | | -- | Gold was the first contrarian opportunity we put on your radar… This was in August 2018 – right after we created the Cut for all paid-up Legacy subscribers. Gold sentiment was in the ditch. The price of an ounce of gold was down 38% from its all-time high at the time. And gold stocks were beaten down even further. Things had gotten so bad The Vanguard Group, one of the world’s largest asset managers, shuttered its flagship precious metals mining fund. Mom-and-pop investors didn’t want to touch gold… or gold stocks. But as we showed you, beaten-down extremes like this are when you want go against the crowd and buy. That turned out to be a good call… Gold is up 47% since then. And gold mining stocks, tracked by the VanEck Vectors Gold Miners ETF (GDX), are up 79%. But since July 2020, gold and gold stocks have been falling… And the timing of that move has left a lot of folks scratching their heads. We’ve seen consumer price inflation in the U.S. surge about 5% over the same time. And investors widely view gold as an inflation “hedge” – something that will offset the loss of buying power inflation brings. There are two reason for this… First, gold is a hard asset. It’s hard to produce more of relative to existing supply. Each year, we dig up the equivalent of about 2% of the world’s above-ground gold supply. Second, there’s only a fixed amount of gold on Earth – about one ounce per person alive today. Gold has preserved buying power over the long sweep of history… Gold is chemically indestructible. So it’s one of the few assets that can preserve buying power over hundreds… even thousands… of years. And as gold aficionados are fond of pointing out, an ounce of gold bought you a top-of-the-line toga in ancient Rome… It also buys you a high-quality men’s suit today. But gold’s record against inflation is patchy over the shorter term… In August 1971, President Nixon took the U.S. dollar off the gold standard. He abolished the fixed exchange rate of $35 per ounce of gold that existed since the 1944 Bretton Woods currency agreement. That’s when the fiat-money era began… and the folks in Washington started inflating the currency without worrying about backing new dollars with gold. After 50 years of govt. secrecy…Teeka Tiwari exposes the truth Since then, the price of gold has risen at an annualized rate of 8.2%. (That’s how much it went up if you spread the gains evenly across each year.) But the S&P 500 has done even better. It’s risen at an annualized rate of 11.2% over the same time. And in any 5-year or 10-year period… you can see drops of 25% or more in the value of your gold. But it’s important to understand something about gold that you don’t often hear about in the mainstream… Inflation hedging isn’t the only reason to own it. Take it from our gold investing expert Tom Dyson… He’s a former investment banker who heads up our Tom’s Portfolio advisory. His main focus there is gold and gold mining stocks. And Tom has skin in the game. In 2018, he liquidated his dollar savings – about $1 million worth – and used it to buy gold. Here he is on the gold and inflation conundrum… It’s true that gold is a hedge against inflation. But that’s a very narrow and unsatisfying way of looking at gold. And it doesn’t give credit to the other protections it offers. I prefer to see gold ownership as a shelter from general financial mayhem and discord. And given the situation we find ourselves in – a gigantic credit bubble – that may be more important than gold’s role as an inflation hedge. Said another way, gold helps preserve the buying power of your savings in all sorts of turmoil, not just inflation. And I think that’s a very important distinction to recognize. That’s why it’s best to think of gold as an Armageddon hedge… Here’s how I put it back in August 2018… One reason you own gold and other hard assets is as “disaster insurance.” They tend to rise in price when folks are worried about rising political and economic risks. And if the world goes to hell in a handbasket, these will be the last assets left standing. Unlike stocks, bonds, options, and other financial assets, gold’s value doesn’t depend on someone else’s promise to pay. That makes it crisis-proof in a way these other financial assets are not. Just look at what happened to gold in 2008… You’ll probably remember the 2008 crash. It took the S&P 500 down as much as 57% peak to trough. And it kicked off the global financial crisis. Gold initially fell along with stocks as traders sold their gold to satisfy margin calls. Then, over the next three years, it rocketed from $724 an ounce to more than $1,900 an ounce. That’s a 162% gain – a near triple in price. Gold did what it was supposed to do: It disaster-proofed your portfolio. So unless you think there’ll never be another crash, don’t give up on your gold. And if you don’t already own some gold, now is a good time to pick up some disaster insurance on the cheap. | Recommended Link | | ATTENTION: Jeff Brown Issues New Buy Alert Jeff Brown, one of America’s top tech experts, has just issued a buy alert on an early-stage company as a way to play what he calls America’s last digital leap. Hedge funds have collectively invested over $2.4 billion in this company. And this past March, virtually all the main company executives acquired shares. Jeff believes they’re positioned for a big announcement the company is planning to make by the summer. Since the company didn’t mention a specific date, it could happen as soon as tomorrow. Once that happens, there’s no telling how high shares could go. | | | -- | Your best option is to buy physical gold… An easy way to get started is with 1-ounce bullion coins. These are different from collectible – or “numismatic” – coins, which carry higher premiums over the quoted gold price. Stick with 1-ounce South African Krugerrands, Canadian Maple Leafs, and American Eagles. These are easy to store. They’re highly portable. And they’re widely recognized around the world. More important, when the next crisis hits, they’ll help shield your wealth from financial turmoil. And just like in the summer of 2018, now is a great time to buy. Mainstream investors have little interest in gold right now. To us, that spells opportunity… In the mailbag: “Tyranny works only with consent from the majority”… In last Wednesday’s dispatch, I explored the thorny issue of vaccine passports. On the one hand, they could be useful in helping us move beyond the pandemic and get back to normal life. On the other hand, they set a dangerous precedent. As I showed you here, China uses a similar system to track a lot more than just your vaccine status. Its Social Credit System monitors how well you’ve behaved in the eyes of the government. Get a low enough score, and you’ll face discrimination in airports, hotels, and jobs. And one reader wrote us to say how much this system reminded him of George Orwell’s novel Nineteen Eighty-Four. The story takes place in an imagined world where citizens face omnipresent government surveillance and propaganda. It gives great insight into how being under constant surveillance makes you feel and act. Many of your fellow readers chimed in to agree… I completely agree that we are now living in Nineteen Eighty-Four. In my view, Orwell’s telescreen – constantly on in the background, filling one’s head with propaganda – has been realized by Fox News and MSNBC. I have thought for decades that the FCC made a serious mistake in eliminating the “equal time” requirement for broadcast licensees. This has led to the current situation, with people isolated in their own “camps,” viewing others with suspicion. The Citizens app, which encourages vigilantism, is just the next step in getting folks to “inform” on each other, another characteristic of Orwell’s future. I’m 70 years old. I take some solace in that I may not live long enough to see this come to full fruition. But I am constantly amazed at how prescient Orwell was. – Gregory H. If Orwell were alive today, he would be horrified at what our technological revolution and desire for security at any costs have brought us to. Orwell published Nineteen Eighty-Four in 1949. He imagined an all-powerful police state, monitoring its citizens at all times. With today’s technology, the state can easily monitor its citizens – without the Thought Police’s helicopters hovering outside your windows, or the two-way-view telescreens allowing them to see inside your room. History can easily be rewritten with the stroke of the keyboard, without an army of Winston Smiths toiling away at the Ministry of Truth. And an individual could easily become a nonperson at a touch of a button, erasing the individual from all data banks and records. Imagine what Orwell would write about a totalitarian state using today’s technology to maintain an iron grip on its people. It would probably look a lot like modern-day China. – Richard K. Orwell was right about our constant need for a bad guy, be it a regime, an oppressive government, or a virus! We must have a war on something. That way, the citizen is expected to accept the war as the invasion of an intruder into the U.S. It’s similar to the aftermath of the Twin Towers’ destruction, when the government passed many new surveillance laws – which the NSA [National Security Agency] proceeded to abuse. – Steven D. I agree with other readers who have also recently read Nineteen Eighty-Four. The totalitarian state is mostly here already. Most sheeple are sleepwalking right into it. It’s a shame that after we’ve experienced relative freedom and property, the next few decades will likely include a dystopian worldwide communist regime. Anyone who is using COVID-tracking apps and vaccine passports by smartphone is part of the problem. Tyranny works only with consent from the majority. – Eric B. Last Thursday, I sent you a link to download a free report on how to fight back against online surveillance. Due to a technical glitch, it didn’t download for everyone. So here’s that link again… The Ultimate Guide to Taking Back Your Privacy Have you read Nineteen Eighty-Four? Is the totalitarian state mostly here already, as Eric claims? Let us know by writing to feedback@legacyresearch.com. Regards, Chris Lowe
August 9, 2021
Dublin, Ireland Like what you’re reading? Send your thoughts to feedback@legacyresearch.com. IN CASE YOU MISSED IT… 9 Billionaires Buying "Disruptive" Technology (Plus, get the pick at the center of it all… for free). At last count, 9 billionaires are backing this new crypto technology. One calls it "disruptive." Potentially as disruptive as the internet itself. And now Teeka Tiwari… The man who picked Bitcoin at $428 before it became the first cryptocurrency in history to rise to a trillion-dollar market cap… giving early readers the opportunity to grab 150X gains… And who was voted "the most trusted expert" in crypto by an independent panel of 130,000 analysts… Believes this crypto could follow in Bitcoin's footsteps and become Crypto's Next Trillion-Dollar Coin. Click here to get the name of the coin for free. 
Get Instant Access Click to read these free reports and automatically sign up for daily research. | 
Post a Comment
Post a Comment