I need to preface any of the below with this is NOT financial advice – this is research on what I have observed over the last few years and have drawn conclusions in this paper that lead me to this hypothesis. Investments don’t always go up – and gold/silver investments are cyclical.
Hypothesis – this is a once in a lifetime transfer of wealth opportunity coming ahead. While we may see the death of the dollar, we may also see the re-birth of American industrialization version 2.0. Gonna be bumpy, but in the mean time, we may see massive moves up in terms of costs in USD coming our way. How I am navigating this and why I’m optimistic long term here.
I’m writing this primarily to those of you who do not understand gold and silver, and thus if you are reading this and are up to your eyeballs in gold and silver and mining stocks, please do our community a favor and send along to those of you not in the know.
What do I mean about once in a lifetime? If you had been in the stock market from the bottoms since 2008, you did very well for yourself by now. Your 401k could be a 5-10x from where it was then. You feel…..secure.
But the system these people created may come down hard – like your uncle Fred falling off of your roof last year trying to help with the Christmas lights.
I believe NOW is the time. That time of inflection where things are going to happen on an irreversible path. I wrote a major piece a week ago about how Russia effectively backed their currency with gold/oil and other commodities yet to be named that got over 150,000 views and let to interviews on Re-thinking the Dollar and Investing News Network that should be out soon.
Why now? Because 51 years of the petro dollar hegemony just ended with that article. Most people have no idea about this. They suffer from a recency bias, and tomorrow will just be like yesterday. Nothing changes. But the changes begun a lot of years ago.
Your financial advisor is probably not in his 70s, and therefore most likely never invested in this type of environment with massive inflation. A lot of the traditional portfolios have been set up 60-40, where 60% are stock market picks and the other 40% is bonds. When times are roaring, you make out really good on stocks and lose on the bonds. When times are tough, you preserve your wealth defensively with bonds that go up in value as stocks go down. That entire paradigm, today, you can throw out the window. I’ve been begging friends to have deep conversations with their financial advisors about inflation and their portfolios.
Most conveyed humor, laughing, and dismissal at what I was telling them when/if they brought it up to their FA. To me, this signaled that we’re pretty screwed because people running the money have no idea WTF to do with 2% bonds and 10% inflation. Years ago, my mother was a compliance officer for one of the big 5 based out of NYC, and one of the items under her charge was ensuring the FAs at their branch offices were selling their packages and not going off book. That happens more than you know. So – my guess is none of the big banks also had any form of gold or inflation defense in their packages permitted by their branch FAs. OK.
But I need to ask you this…where do you put your money today?
- Real estate – you own a home. These go up in value over time, right? No, you are seeing how inflation plays out over years. Your house doesn’t go UP in value, you just need more diluted currency units to buy it. With 5% home mortgage rates now, and rates only going to increase, you are going to see housing prices come down. Hard.
- Stocks – stock market looks shaky these days. But we are now seeing higher costs of borrowing. Zombie companies may die. Wages are going up, margins are going to get pinched more as they try and pass on costs to consumers. Many consumers will have to cut back purchases. We may end up with significantly reduced earnings, leading to even higher stupid P/E ratios and with stagnation, it seems likely that money will come out of these stocks and rotate into something with alpha. Meaning – your 401k could shrink by 20-80%, depending on what analyst you listen to.
- Bonds – I wrote a piece last summer where the bonds getting killed are the end of the everything bubble. Who in their right mind puts a large chunk of money into something paying 2% yield when shadowstats has us at 17%? You are now seeing what happens when bonds go in the free market – until the Japanese decided to buy more debt, presumably to not bag hold and settle the rates. Problem is, you may now have a lot of countries like China and the Saudi bowing out of buying our debt.
- Speculative property – bitcoin, NFTs, beach front property – all of this may be the first to go. While you may end up with 5-10 shit coins in 5 years out of the 10,000 plus that exist now, the SECTOR as a whole will crash like the 2001 dot com crash.
- Cash – this is always a good play for short term, and where a lot of the above may go when they realize things are for shit. This is your financial energy purgatory. And, every day you hold financial energy here, inflation takes the value of it. In 1 year from now, you could lose 16% of the purchasing power of that cash, so it is a hot potato.
- Commodities – many of these commodities now have mooned. Steel, nickel, copper, wheat – and with global famine about to hit, you can imagine a lot more food-based commodities are going through the roof. Biden unleashed a plan to fight high oil prices by helping lithium miners in the US. That’s sort of stupid, but cute. You need semiconductors from Taiwan, and neon gas made in Russia/Ukraine and palladium made in Russia. You need 189 pounds of copper, type 1 nickel, cobalt, and silver on top of that lithium. Most don’t realize it might take 15 years to get a mine online. Or, we could simply drill more oil. Don’t underestimate the stupidity of leaders sometimes. Most people now being squeezed at $4 gas are making less than $50k per year, and the answer to them is to promise them they will have the lithium for you to buy a $70,000 EV years down the road?
- Precious metals – commodities above have run pretty hot, but these two are the last place to put your money that are undervalued. Silver is at 50% of its 1980 all time high, and is used in thousands of products – including solar and EVs. Gold is “god’s money” and all central banks around the world have been buying it up for a decade. If you want to skate to where the puck is going, you can see a day where fiat shit currencies are shunned for gold. OR – they are backed by gold in some form. Russia has done this to an extent, and by offering this as payment, it now made gold a universal currency again. As countries now are looking to de-dollar after the sanctions we put in, it stands to reason now is the time where money flows into PMs.
Contents of Hoover Dam through a garden hose
Rick Rule, former CEO of Sprott, has come out and said that the 30 year mean for investors holding gold was 1.5% of their wealth and we are at .5% today. What this means in the investor scenario above is perhaps you have real estate, stocks, bonds – historically 1.5% would be towards gold. As other things went down in your portfolio, your gold holdings would go up.
What Rick says is – he doesn’t need gold to moon, if we just went back to the 30 year mean, it would triple what is in gold. True – kind of. Where the last 12 years has been a major bull market for stocks – you would see cash increase towards the stocks. This would tend to take the amount of gold as a percentage of investments down. If those investments shrunk by 66%, you’d be back at the mean without ever having to add 1 dollar to gold. But what he is saying is that as money rotates out of things like tech stocks, you may have not only the inflows to gold increasing, but the pile of money in stocks dwindling. So it doesn’t mean you need 3x the current investment to get there.
Doug Casey has said, when investors wake up and see what is going on, it will be like trying to get the contents of Hoover Dam through a garden hose. The run for gold (and silver by extension) will be a tremendous amount of people rushing towards a small pile.
Yesterday, Newmont made an all-time high, and it made some news networks.
This is significant because Newmont is THE biggest gold miner on the planet, with Barrick a close second. These companies are profitable at $1200 gold, and with that, are printing cash flows at $1900 gold. With the promise of gold prices only going up in the future, given current circumstances, it seems to reason that the companies pulling gold out of the ground would do well.
All of them are.
Left for dead
Many feel gold miners have been shunned because in the last run up of 2011, many of these companies went on a feeding frenzy and bought expensive projects that would not work unless you had $1600+ gold. Many of these projects require hundreds of millions of capex and a LONG time to explore, permit, understand feasibility, and then develop. Many don’t realize that a mine could take 10-15 years, sometimes 20.
But these companies all raced each other to spend, and acquire these assets…then the gold price tanked back to $1000. Many companies went out of business, and investors were burned and many would never come back. However, these companies that came out of those ashes are much better stewards of capital. They have been disciplined, frugal, risk averse, and print cash.
For every ounce of gold you take out of the ground, you need to replenish it. Companies like Newmont may have 10-20 years of reserves left and teams upon teams of geologists. But then you have mid-tiers and juniors which are extremely profitable right now, but as gold price hits $2500-$3000, many of them may do a 5-10x. The issue many of these smaller companies then have is how much to put back into the ground with exploration. They can be constant growth stories – or perhaps get taken out for 35% premium to share price.
But seeing Newmont hit all time highs may now signal big institutional money may have started the rotation into gold.
Phoenix rising from the ashes
Gold companies now are primed to go into outer space – with the gold price. I’ve done the math several times, but I want you to see how a $2400 gold price might affect profitability of some of these companies.
Major might have $800 profit at $2000 gold. A move to $2400 gold takes their profit from $800 to $1200. Or, 50% higher profits.
A mid-tier with a profit of $400 could then realize a 100% profit move at $2400.
A junior with $200 profit could have a 200% profit.
Now, with that, it doesn’t mean that Newmont’s share price may go up 50% with that move to $2400. It could mean that their share price doubles as people are chasing highly profitable companies and overbid. That junior could go 6x? Who knows exaclty.
The point here is this entire sector is profitable, and as you are seeing a rotation out of stocks and bonds – and perhaps real estate – where does this money go? Cash? We have seen evidence of that with the DXY rising. But as people understand inflation more than then realize that cash has to go somewhere or erode, where is it going?
Gold and silver, and gold and silver mining stocks.
Past is not prelude
What we have heard of before are stories where with the inflation starting in the 1960s, silver junior miners went up an average of 156x. Not percent. You have seen that in the 1970s, gold went up 24x and silver 29x. The period today is very similar to the 1970s, with energy, inflation, stagflation, and metals.
Does that mean we have 24x to go in gold yet? No. Maybe. Probably not.
Many like to point to recent performance of gold. “Gold sucks”. “Nate, silver isn’t doing anything”. Well, they would be right, to an extent. But wrong, in the bigger picture. I got involved with gold/silver MINERS in Feb 2020, right before the massive March 2020 bottom. I wasn’t heavily in then in Feb, but March I was. In 3 months, my portfolio doubled. I took a bunch out then because I thought that the markets were going to crash again, and luckily, avoided a lot of the gold/silver pull back in 2020. I then got baptized in 2021 with everyone in the sector.
My trading account, today, is what it was in March 2020 – but I had also taken significant cash profits out in July/august 2021 to pay for repairs on a rental unit. But right now, I’m armed with the knowledge of what happened on the last run up. What happened was my portfolio doubled in like 3 months. Can that happen again?
Yes. Actually, it should have happened. It’s just now about to catch up.
You see, when gold went from $1500 in March to $2089 in July, it made a massive, massive move up quickly – anticipating the inflation to come. Over the next 10 months, inflation didn’t come. Powell then kept saying “transitory” and gold kept receding. If you look at the charts, August 2021 is when gold finally hit the bottom a 3rd time as inflation kept sticking around and increasing. As gold just about hit its recent high a few weeks ago – one would expect the gold miner prices to be what they were in July 2020.
They aren’t. What it LOOKS like, are those who piled in for the move up in July 2020 and got scorched in 2021 are shy of the sector. They aren’t believing it. But Newmont may be institutional money saying…”believe it”.
On this Newmont chart, you can see the gold moves up as reflected with Newmont reacting.
To me – Newmont seems to be getting all of the love. Now, let’s look at AEM, I believe the 3rd largest gold miner by market cap.
AEM is a HIGHLY respected company, so what this is more or less telling you is that NEM is a proxy for gold miners, in most peoples’ eyes. This also tells me that NEM may be a little overcooked and AEM a little undercooked, relatively. When checking PE ratios, NEM coming in hot at 56x and AEM coming in at 28x. What this CAN tell you isn’t necessarily that NEM is overvalued – but investors are expecting these higher gold prices will lead to much higher earnings and growth. And, they would not be wrong.
Point is here, with gold prices set to soar, this is how you can get stupid rich if you feel cash is about to rotate into the sector.
Why the rotation?
I covered some of the big reasons above, but the bigger picture is that it seems that the number of USD currency units needed to buy one ounce of gold is about to moon. I dug into the nuances of the gold/oil/ruble situation from a few weeks ago and it was very easy to conclude that the USD hegemony is now over.
What this means is many countries may no longer feel the need to own USD to do business. Russia is a major commodities producer and it seems like they are going to want to get paid in rubles or gold. If our currency is sooooo inflationary, many other countries may rush to sell their dollars for gold, which rises with inflation.
This has the net effect of exporting USD that are offshore BACK to the US for us to then import THAT inflation. When we are already at 16%. It’s almost as if this was choreographed. Seriously. We can feign that we are fighting inflation with quarter point hikes, meanwhile having 16% inflation to inflate our way out of debt. All we have to do is hand over the world’s reserve currency title. Done.
But most have not grasped yet that is what happened. They are in denial. Have that recency bias.
It will be come clearer in the next few months that prices will not go down. Commodities will get more expensive. Countries may no longer take the USD. USD may come here to bid things up higher. No countries are going to want to buy our 2% debt. Interest rates will climb. I also wrote a piece where I asked the question, will they let interest rates run? Many assume that in September or so, that the policy mistake will be realized and they will reverse course. But….what if the goal here IS to deflate the economy by taking the whole %@#$%#% thing down? I asked the question in that piece – what is more important. To save the dollar, or the stock market? If you save the dollar, you can rebuild the stock market. If you try and save the stock market, the dollar goes to shit and you run into hyper inflation. Many feel it is inevitable that we reverse course.
But we may not. Perhaps the idea here is to default and then launch a new currency?
Overall, as the stock market continues to have pressure, AND the world moves away from the dollar – we will see more and more inflation here, coupled with lots of strife and civil unrest. Gold catches a bid on fear, and well, that’s a coming.
So what we SHOULD see is gold starting to cost more and more and more. This then leads you to believe that miners may print more and more and more.
The Ruble and the gold floor
Many of us felt that $2500 gold was next – possibly $3000 gold. That’s using the system that we know with the rigged COMEX. After so many years, the pressure builds and gold/silver must rise – then they short them into oblivion. But what if I told you those systems may break? We saw what happened a few weeks ago with nickel, and I must tell you, this is precisely how I predicted silver would go. Vertical and break the markets. It almost happened during the silversqueeze until the CFTC commissioner came out and admitted they “tamped down” the price. Pretty unbelievable to hear a government person come out and say they were responsible for stomping a market move.
But what if I told you that system no longer would price gold?
You see, what the Russians did was pretty sneaky. I’ll drop the picture below and let you reference my article.
I spoke specifically of the gold and oil/ruble arb, but there was a gold floor on the other side of that arb. I saw a chart I needed to add and share with you. This chart shows what the floor price of gold is, with the ruble arb opportunity now. Meaning, the stronger the ruble gets to the dollar, the higher the floor of the gold price.
If the Ruble strengthens to where it was from 2001-2013, that’s a $5000 gold price with peaks around $6700.
Meaning, these banks that are massive short gold and silver right now have to be watching the Ruble against the dollar. They have to. Because what I can see coming is the physical markets then dictating the price of gold, and thus silver, for years to come.
IF gold were to get to $5000, that could imply a $100 silver price at 50:1. At historical 15:1 ratios, it’s close to $300 silver. Now imagine an overshoot to $8,000 to $10,000?
Sky is now the limit
Where many of my miner predictions at $3000 gold and $50 silver may have had my portfolio do about a 10x from here, you must then consider a situation where $5000 gold and $100 silver is a reality in the next 12-36 months. Now, it would not be a straight up move here, but I could see the below happening…
Mid-tiers – 20-40x
Juniors – 30-150x
Remember that 1960s silver junior miners thing? Imagine the FCF of a Newmont who can produce an ounce of gold for $1,000 and are now getting $4,000-$6,000 per ounce profit rather than $800? That is a 5x on profit for a $60b company. It stands to reason that mkt cap could go 10x from here. $6700 gold? That could ensure the 10x.
Meaning, if you just bought GDX and did nothing else, you could get a 10x. This may be where some pension funds may rotate into.
Now, imagine if you knew the best mid-tier plays out there? The best juniors? Putting $1,000 into a Discovery silver with 1 billion ounces of silver in the ground could get you $100,000? Sound silly?
Discovery silver market cap is $620m. They have 1b oz of silver in the ground. That means the silver in the ground right now is valued at about $1.50 per ounce at $25 silver. Now imagine silver was $100 per ounce? That doesn’t mean it gets valued at $6 per ounce. It could be $30 an ounce at that point. That billion ounces of silver in the ground has $100b of metal in it. For a company with a mkt cap of $600m. At a $30b valuation, that is a 50x. Now imagine that silver at $200 per ounce and the silver in the ground valued at $60 per ounce? There’s another 400m oz there that are low grade, and with $100 silver, I bet that works nicely. There is a path for 100 baggers from some of these, easily, if gold/silver rises substantially.
Chesapeake gold has 19m oz gold and 530m oz silver. It’s low grade and needs a new tech to make it profitable at $1800 gold. At $7000 gold and $100 silver? Just think of the trillions sitting there. For a $200m market cap company.
My favorite mid-tier I’m projecting a 5-8x for $2500 gold, which is Fortuna Silver Mines. It’s a mid-tier gold producer now, but the numbers work out amazing for $2500 gold. At $5000 gold and $100 silver, you might see another 5x from there. That’s a 25-40x from today. For a $1b company. If I have a weighted portfolio towards mid tiers, I can get some of the stupid high multiples of a junior with the risk profile of a senior.
While all of these numbers look silly, you have to understand the opportunity that is there. Could nations tax these miners higher? Yup. Could that mute the high cap earnings? Yup. But capital goes to where it is appreciated most, and you may find a company like Barrick that works in a lot of shady jurisdictions may run unimpeded where a Canadian miner could get taxed at 80%. Investment may then run to African mining. Or Chinese. Or Russian. So while you may have some miners nationalized under this situation, you may find that an Africa may open their arms to capital investment and Aya Gold in Morocco could be an investment haven for gold and silver. Fortuna’s African miners could be a beginning of a major move in Africa who wants capital inflows.
Furthermore, you may have countries start to stop the export of food and strategic metals like uranium, titanium, and silver. China does not let gold leave its borders.
Right now in our globalist way of doing business, if you want to assemble something in the plant in the US, you may hire a lot of US workers, but you may source parts from all of the world to be shipped there. What you are seeing now is when you have a problem with one part, like semiconductors, it can take down the whole auto industry in the US. Germans have just been baptized on how energy that is imported is the key to their whole economy.
I have written many times before that gold is the center of the financial universe, but those like Steve St. Angelo correctly attribute energy to running a nation’s economy. I agree with Steve on about 90% of things, but for me, I feel there CAN be a move towards SOME things that can help, sooner rather than later. I feel there is promise with battery technology that can help with mining, and if you can put a good portion of the mining/drilling industry on a solar/wind/nuclear/hydro power source – you can then begin the path of cleaner mining/drilling. These things cost a lot more to do, but we are approaching that period where things are about to cost a lot more to do anyway.
There is a path there in 10-20 years, but we will need nuclear, nat gas, and (clean) coal to get us to the finish line. However, I believe the moronic far leftists have shot everyone in the foot to try and get us there more quickly, but have no idea how things are made.
I believe like many, that there is a path of a commodities super cycle ahead. Many countries may now ban exports of a good to another country for various reasons. Supply chains need to be re-shuffled. Also, you can hear calls for doing things locally, if possible.
In the US, Hecla is a big silver miner. I have them on my majors list due to how I think silver may go nuts, but also as the only real US producer of silver could be crucial to local supply chains. To the best of my knowledge, there are no US uranium producers. Where are we getting the 189 pounds of copper for the EV? Chile or Peru?
Where are we getting semiconductors if Taiwan is annexed by China?
I believe 2022 is the beginning of the end of the “tech” boom, where we don’t need another goddamn app to feed our goldfish routinely. We need THINGS. 2023 is the true unraveling. 2022 is just the popcorn even and catalyst to what may happen. The currency is how we are buying things all over the world to ship here, and if the USD starts to import the $20T of cash that is offshore, things get a lot more expensive, a lot more quickly. If you are an Italian multi-millionaire and sitting on $10m in cash in a Swiss bank account, are you planning on holding that cash as you start to see a decline, or are you converting to another paper currency or gold?
As the currency unwinds, so does the supply chains.
Good things ahead
Being the world’s reserve currency, it has its privileges and its drawbacks from what I can see. Sure, we are able to borrow money into existence, and having this liquidity is extremely helpful. But the downside is that all other currencies tended to artificially depreciate their currency against ours. So the trade off for the last 40 years was watching tons of American jobs go elsewhere as things could be produced more cheaply in those countries. Due to this, those countries were then able to secure a lot of jobs – thus also implicitly buying our finished goods and services to keep the symbiotic relationship up.
But if you connect the dots and see US currency being devalued in real time against the ruble and yuan, AND you can see supply chains faltering overnight, you thus also see the ability for the Americans to produce liquidity easily and finished goods cheaply also evaporate.
One conclusion of my friends on Twitter that are of the East seems to be that this is going to turn the US into a third world nation and their nations will turn into super powers overnight. I think those are conclusions I would not draw, at this time, because those symbiotic relationships go both ways.
Someone was quick to point out that in the short term the ruble may benefit, but longer term Russia is doomed. I would not go there either, and definitions of short term/long term are subjective. What I see potentially is the Americans voluntarily removing themselves from the world’s reserve currency for two principle reasons:
- Currency imbalances have made it relatively impossible for us to produce ANYTHING here, and with this, America has been gutted of its industrial roots
- Our debt can no longer be serviced and a high level of inflation is the only way to transfer to a new system without being impoverished for the next 100 years.
I do see Russia’s nat gas play a checkmate for the ruble to gain on the dollar. But, at the same time, you also now can clearly see the demise of the dollar as we know it. This semi-hyperinflation of the dollar to come can be a debt jubilee in that higher capital gains, higher tax revenues, higher property values, and higher wages CAN be a path out of the noose they are in. I think the US isn’t the one going to suffer from the depreciated dollar longer term, but the Europeans are with energy problems.
You remember that symbiotic relationship I was talking about? The US GDP is nearly 20% of all GDP, but we are only 3.75% of the population. Once you consider that American spending power is about to decrease, you can imagine those cheap goods at Walmart may sit on the shelves longer. I can see a day where a US president/congress is right leaning and drills oil/gas and with this, we have very cheap energy costs. This can potentially lead to a lot more raw material production here, and with this, cheap factories.
Cheap factories? Remember how we have all of the top technical minds out there – we can make factories with AI and robotics – with cheap energy and cheaper raw material we can produce, we can then bring production back to the US in droves.
I then want you to consider that if the US has all of this oil and gas we can drill, AND we have all of this gold, silver, uranium, copper, wheat, corn, and all other goods – AS the US dollar declines substantially in value, it then means that more of the jobs we had created worldwide via demand are going to disappear. While it may be true the China middle class can grow, it is clear today China’s major rise to power comes from exporting cheap goods to the US. So I don’t think China wants the US dollar dead, anytime soon.
However, that may be the game of chess going on behind the scenes we are not privy too. If you play chess and saw 5 moves out, Putin perhaps sending a kill shot to the USD may have been the game for him all along. But consider 7 moves out and bringing back jobs to Detroit and semiconductors to Arizona and oil to Texas and Alaska – may be the US’s move here, all the while the currency goes into a super-inflationary state to reduce their debt burden.
I think it’s smart to acknowledge there’s a lot of turmoil ahead. Energy will drive economies, and I can bet you with a red congress (republican) in 2022 and a red president in 2024, that cheap energy production here will be day 1 priority. I think it’s also prudent for the US to cut budget items for a lot of things. I have been a fiscal conservative and social liberal most of my life which has me wanting to reduce the size and cost of government, along with reducing regulations – which can speed up mining and drilling of resources.
The immediate future
It is clear to me now that the US has zero intentions of stopping the spending and intend to run up the credit card to get as much stuff as we can before the card is cut in half. If you run for president, you cannot run on a platform of cutting spending and win, ever again – at least in the current system. I believe 2022 is the beginning of the unraveling and 2023 may be where commodities are in super orbit. If it costs $75 to buy silver on an exchange, but I’m an American miner and can get in to the business and buy an old mine, raise $20 million, and produce silver for $35, that is profitable for me. This is how you then eventually see these commodities come back down to earth. Enterprising Americans here WILL fill those gaps to produce these things here more cheaply.
While we have vast amounts of resources here, we also have a stupidly highly trained workforce and all of the academic support on the planet to make a lot of high tech-backed products. Imagine a Detroit factory of 40 years ago with 10,000 union employees producing 350,000 ICE cars whose jobs were displaced to Mexico and other countries over the years – as we were importing parts from all over the world. Detroit turned into a high crime shell of its former self.
Now imagine you can create a factory there which has 20,000 high paying tech manufacturing jobs to service robotics, program, do logistics, inventory, sales, and marketing – and you can produce 3 million EV cars there that cost between $25,000-$45,000. We do not need parts from all over the world anymore. The lithium, copper, cobalt, nickel, and silver are all sourced from the US using electric mining vehicles, all powered by solar, hydro, or nuclear.
In fact, we produce cars so cheaply and so efficiently we start to export to other countries. Consider a good portion of our budgets that go to law enforcements, prisons, etc due to the lack of opportunity in some areas in this country. Imagine Ford and GM announcing these plants to open in Detroit? Imagine how many people would come there for the high paying jobs, and what that would do to their labor forces and tax bases? Then consider goods that are on the shelves at Walmart are slowly replaced with products made in the USA for cheaper than in China? Remember – that currency debasement thing has benefits to producing locally.
So I think many people see my writing and think I see 50 years of devastation here. Nonsense. I consider there will be a great turmoil here as we move towards that next reality. What I see is a rotting system that needs to be pruned and evolve. I see a clear death to the existence of HOW the USD works. I can SEE a path forward where commodities can back currency. And the US has an ungodly amount of raw materials we have yet to expose. I can see how robotics, AI, natural resources, and efficiency can quickly propel us back to the top producing nation of goods in the world. The benefit then, is you have a lot more middle class people around the world to buy our goods, AND the amount of jobs we can create would thus lift a lot of our people out of poverty and reduce the need for any form of government UBI.
with energy, consider that we have 300 years of coal here for us. While there is a path to cleaner energy, there is no doubt that until we get there, we must leverage existing resources to backstop us until we get there. At issue is US policy makers must be smart and strategic to devise these transitions rather than kowtow to the Greta Thunbergs of the world.
I see Europe in danger as they do not have the ability to self sustain energy unless they go all in on nuclear. Short of that, they will be reliant on foreign energy.
One thing I agree with Putin on. The WEF can stuff it. I will own things, I will have my privacy, and I will be happy. Getting there is going to be a bumpy road.
Stick around folks. Commodities are going to moon in terms of USD, but this also then has the opportunity to roll some of those eventual profits into start up US firms that re-patriate a lot of jobs here.
April 4, 2022 at 2:35 am
March to $2089 in July, it may a massive,
Typo. May to made
Good article. Most goldbugs nowadays won’t touch stocks. They been burned too many times before and a majority just want the system to collapse. Of course, that happens, .gov is going to seize all domestic gold. Coins and mines.
And you’re a bit too optimistic for the hardcore gold bug to enjoy.
Hopefully you can retain a portion of your new readers. I’m staying. Good blog
April 4, 2022 at 6:07 am
Appreciate….I did make a correction to that typo.
The stocks are leverage to the real thing obviously. I advocate for most “common folk” such as myself to accumulate some silver here and there. Most of us are priced out from gold in any size, and the doomsday side of my thinking realizes you cannot trade an ounce of gold for food. Silver dimes and quarters are superior for this function.
I write this blog for me. I like to get what I’m thinking to paper. So I don’t really care if I’m “too optimistic” for some. I don’t write for the audience, and those that do not like optimism may drop off at some point. I’ve been building readers in various topics here for the better part of 6 years, so not too concerned about any one article attracting people I then must cater to.
I’m a silverbug and potential doomsday guy (somewhat of a prepper) who is a massive fan of Michio Kaku and futurism. Gold came along for the ride.
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April 4, 2022 at 3:04 am
Wow, you got me feeling all patriotic again! Imagining the way things can be here in the US.
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April 4, 2022 at 6:13 am
Most that are in this space think the death of the dollar means utter chaos and third world nation status for 100 years. Who was the world currency before us? Great Britain? They had tough times with wars obviously, but their people got stronger and thrived. I am of the belief this debt is a massive problem and about to tank our currency – but I feel from this that perhaps we may come out of this as a more frugal nation who doesn’t bow to massive excesses. We are inherently a saver nation that was corrupted somewhere in the 80s to covet everything everyone else had. That led to wild consumerism to then “keep up with the joneses”. Dating in this country then became impossible for most unless you lived beyond your means, which led to lots of divorce or broken homes. I believe there will be struggle, and if/when the government cuts spending out of necessity, people may get stronger, turn to their communities for help, or start to take accountability for their own lives. Make no mistake, to get to the other side may have many challenging days. But all 4 of my grandparents got out of the Great Depression and thrived with the opportunities after it. I plan to be one of those people who can provide others opportunity.
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April 4, 2022 at 10:05 pm
If you have not read through H.R.3684 – Infrastructure Investment and Jobs Act, I highly recommend you take a look at it specifically focusing on the geological mapping initiatives (do key word searches for USGS, mineral, geological, etc). I believe you are correct in the return of manufacturing to the U.S. and theorized the same outcome after reading through the aforementioned legislation. Cheers.
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April 15, 2022 at 11:13 pm
Nice piece! I agree for the most part. But what if the recession comes by the end of 2022 or sometime in 2023 because of the FED aggressive rate hike to control inflation? Wouldn’t that break the commodity super cycle due to demand destruction?
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