Selasa, 27 Juli 2021

The Two Words That Are Going to Launch Gold

Money & Crisis

July 27, 2021

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The Two Words That Are Going to Launch Gold

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Graham SummersDear Money & Crisis Reader,

Yesterday I outlined how real rates suggest gold will be moving MUCH higher in the coming months.

By quick way of review:

  1. Because we are in a fiat-based monetary regime, gold trades like any other asset.
  1. Specifically, gold typically tracks “real rates” or the actual cost of money as illustrated by the difference between yields on Treasury Inflation-Protected Securities or TIPS and regular Treasuries.
  1. Real rates typically lead gold at major turns. We saw this at the bottom in March 2020 and more recently in June 2021.

Recently a massive divergence has developed between real rates and gold, with real rates rising and gold lagging (see the chart below).

Chart

This would suggest gold will be going MUCH higher in the coming months.

Why?

Inflation…

Remember, real rates represent the difference between the yields on Treasury Inflation-Protected Securities (TIPS) and regular Treasuries. So, when TIPs outperform regular Treasuries, this line rises, and when regular Treasuries outperform TIPs, this line falls.

So, the fact real rates are rising so aggressively means that TIPS, which focus on inflation, are dramatically outperforming Treasuries right now. This means the bond market is predicting greater inflation is coming.

What would trigger this?

Two things:

  1. The $2-$4 trillion infrastructure program the Biden Administration is hoping to sign into law in the near future.
  1. Jerome Powell’s continued tenure as Fed Chair in 2022.

Regarding the first item, policymakers have already made it clear from their response to the 2020 shutdowns that their entire blueprint for dealing with crises boils down to just two words.

October 14th: America’s Financial Extinction Event?

Lady LibertyThe election is over…

The corrupt media declared Joe Biden the winner…

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Because the prophetic analyst who predicted the subprime mortgage meltdown… the financial crisis of 2008… and Brexit…

Just issued another shocking prediction…

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You need to take action now.

Click here for the full details.

PRINT MONEY.

Shutting down the economy triggers a depression?

Print money.

Stock market experiences fastest 30% crash in history?

Print money.

Municipal bonds collapse because investors don’t believe cities and states will be able to meet their debt obligations?

Print money.

The economy continues to struggle because state officials still have their economies partially or completely locked downs?

Print money.

The economy isn’t coming back fast enough despite vaccines and states reopening?

Print money.

Indeed, policymakers printed so much money to combat the impact of the COVID-19 lockdowns that if you add up all of the money the U.S. has ever printed… over 40% of it was printed in 2020.

And the Biden administration doesn’t intend to stop anytime soon. It has already printed $1.9 trillion in stimulus. It’s now looking to print $2-$4 trillion more to pay for an infrastructure program it wants signed into law. And after that it hopes to print and spend another $1.7 trillion on its climate change program.

Inflation is already roaring. What do you think another $2-$4 trillion in money printing will unleash?

And bear in mind, that’s just the Federal Government. We’re not even accounting for the Fed here.

I’ll dive into that tomorrow.

An Opportunity Setting Up?

There’s no denying the TIPs market is signaling massive inflationary concerns. And those concerns have finally pushed real rates to new highs.

That means there could be a big opportunity brewing.

Like I’ve explained before in this letter, lagging real rates have been the only thing holding precious metals back. Now I believe market forces are finally setting up to drive gold and silver higher. (Possibly a lot higher.)

If you share my outlook, this might be one of the best opportunities to add gold or silver bullion to your portfolio.

If you’re interested, I’d like to recommend our partners at Hard Assets Alliance. (Full disclosure: We’re part owners of the company.)

They’re a full-service dealer and can buy, sell, and store your bullion for you.

But better than that, they offer a program that lets you accumulate positions in gold or silver on autopilot — for as little as $25 per purchase. (The “dollar cost averaging” power this program gives you, means no more worrying whether gold or silver are ready to bottom.)

It’s one of the most unique programs I’ve ever seen. It’s called Metalstream and you can get more information or open an account here.

I highly recommend you check them out.

Until tomorrow…

Best Regards,

Graham Summers

Graham Summers
Editor, Money & Crisis

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