Connect with us

Articles

Time To Say Goodbye To The Everything Bubble

Time To Say Goodbye To The Everything Bubble

Authored by Egon von Greyerz via GoldSwitzerland.com,

Will the autumn of 2021 be the end of…

Share this article:

Published

on

This article was originally published by Zero Hedge

Time To Say Goodbye To The Everything Bubble

Authored by Egon von Greyerz via GoldSwitzerland.com,

Will the autumn of 2021 be the end of the everything bubble?

Are investment markets very soon coming to the end of market insanity?

Since there is very little sanity left in markets or the in the world economy, we have now reached a point where we must accept madness as sanity, as George Bernard Shaw said:

When the world goes mad, one must accept madness as sanity; since sanity is, in the last analysis, nothing but the madness on which the whole world happens to agree.”

George Bernard Shaw

Investment markets today are all about instant gratification and getting rich quick.

“Stocks always go up” and so does property in the everything bubble. Even the normally boring bond market has had a 40 year rise. And then we have the supercharged tech stocks, many of which have gained 1000s of percent in this century

And we mustn’t forget the SPAC stocks (Special Purpose Acquisition Companies) or Blank Cheque Companies where shell companies are used to acquire existing companies to inflate their share price.

None of these things are new of course. During the South Sea Bubble in the 1720s for example, companies were formed and capital raised with just the purpose of “Making Money”.

We mustn’t forget the cryptocurrencies which are now worth valued at $2 trillion. They were just over $1 billion 8 years ago. Is that the bubble of the century like tulip bulbs in the 1600s or is it the money of the future. Well, most readers know or can guess my opinion on this!

VALUE INVESTING & WEALTH PRESERVATION IS FOR “WIMPS”

In a world where everything is based on “get rich quick” neither value investing nor wealth preservation enters the equation. Why worry about preserving your wealth when you could have made 14x your money on the Nasdaq since 2009 or 5,000x your investment on Bitcoin since 2011.

Calling tops is a mug’s game. Some of us who look at risk have been worried about the everything bubble economy for quite a while. To us, since the end of the Great Financial Crisis in 2009, the world economy and asset markets have been an illusion.

It is as if we are watching a virtual reality game in which some people automatically increase their wealth by millions or even billions of dollars every time they pass GO.

But as the rich are getting richer, the masses are just getting poorer and more indebted.

Although we see the wealth that has been acquired by many as an illusion that will soon evaporate, for the ones who have benefited, this is all very real.

Anyone who believes that these gains are real and sustainable will have the shock of a lifetime in coming years. As I showed in a recent article about the End of the US Empire, the wealth of the 400 richest Americans has gone from 2% of GDP to 18% in the last 40 years.

This concentration of wealth is of course spectacular but also very dangerous for the world. Trees can always grow taller but they never grow to heaven!

AT THE END OF AN ERA – FALLS OF 90%

So as Shaw said, we are now in “the madness on which the whole world agrees”.

As I have often stated, I believe that we are at the end of a very major economic cycle. Not only are markets insane, but so are deficits, debts and currency debasements.

But also moral and ethical values have now vanished into thin air and been replaced by lies, deceit and the golden calf.

We are now in a very critical period for the world since excesses of the magnitude we are now seeing must be corrected.

Exponential moves in one direction are always corrected. And the corrections will be of a similar magnitude to the rise but happen much quicker. We are talking about falls of 90% or more in all major asset and debt markets.

Nobody believes such moves are possible with central banks and governments standing by with unlimited money printing combined with new Central Bank Digital Currencies that will save the world.

ILLUSIONS ARE JUST ILLUSIONS

We must understand that illusions cannot rescue the world economy.  This despite whatever concoctions central banks or Schwab (World Economic Forum) and his billionaire cronies come up with.

Virtual illusions in the form of fake money or empty promises can never repay debt, nor can they change the laws of nature.

Clearly all these “evil forces” will use their power to orchestrate fake resets to “save the world” in an attempt to tighten their grip on the world economy and the financial system. But a heavily indebted and fake system can never be reset in an orderly manner.

In my view, any artificial or fake reset will only have a very limited effect. It is just not possible to solve a debt problem with more debt whatever way the PTB (Powers That Be) try to dress it in sheep’s clothing.

So an orderly reset is bound to fail very quickly. A new digital Fiat and thus fake currency will not solve the world’s debt problem.

Writing off the debt is just another illusory act. If you write off the debt, the assets on the opposite side of the balance sheet will also implode in value. And since the debt is leveraging the assets, they will have a very long way to fall.

This is why asset implosions of 90-100% are very likely. Few people believe this to be possible but with debt collapsing so will the bubble assets which are all inflated by worthless debt.

We must remember that the big stock market crash in 1929-32 saw the Dow lose 90% of its value. It then took 25 years for the Dow to get above the 1929 high. And today 92 years after that peak, debts, deficits, and asset bubbles are far greater than at the end of the 1920s.

Below are a number of graphs that all point to the everything bubble.

THE BUFFETT INDICATOR

So there we have it, incontrovertible proof that this is the mother of all bubbles.

But as we have learnt in this century, bubbles can always grow bigger and especially if we are looking at the end of a major super cycle which could be as big (or long) as 2,000 years.

Nevertheless, the evidence keeps mounting of an epic asset bubble. In addition to the charts above that point to illusions never seen before in markets, we have a number of technical indicators that all point to the end of the everything bubble.

In the chart below, the RSI (Relative Strength Index) momentum indicator for example topped in 2017 and the major rise in the Dow since then has not been confirmed by the indicator. This is a very bearish sign albeit not a short term indicator.

Many other technical indicators including Elliott wave or Dow Theory all point to that a top to the everything bubble is imminent. Whether that means a top next week (which is possible), or in the next few months, time will tell. Some important cycle indicators point to potential turns between now and Sep 24.

SURVIVING THE EVERYTHING BUBBLE IS ALL ABOUT PROTECTING FROM RISK

But what is much more important than pinpointing the exact timing of the top is to understand the risk involved.

If, as we believe, we are now at the end of the everything bubble, nobody needs to time it. Investors should understand the upside might be 10% and the downside 90%+.

Who is foolish enough to accept such a risk? Maybe a 10% move up but a more certain 90% fall.

We are talking about a fall in real terms. If we get hyperinflation stocks and other assets can rise in nominal terms but fall in real terms when measured in stable purchasing power, like gold.

Well, that question is easy to answer. The whole investment world which has been spoilt by tens of trillions of dollars of fake money to fuel the Epic Everything Bubble will expect much more of the same in coming months or years.

Yes, much more money will be created but this time it will have very little effect. Instead the dollar, euro, yen etc will accelerate the falls that we have seen since 1913. They have all fallen 98-99% since then and by similar percentages since 1971 when Nixon closed the gold window.

The final 1-2% fall will soon start and take most currencies to their intrinsic value of ZERO. But don’t forget that this final fall is 100% from here.

Remember that measuring your assets in for example dollars is a futile exercise in self indulgence. You are just flattering your investment skills when you measure your performance in a currency that has lost 98% since 1971 and 84% since 2000.

If you use the same method in coming years, your paper wealth might look ok but be worthless in real terms. Just ask anyone who has lived in a hyperinflationary economy like Yugoslavia, Argentina or Venezuela. 

So what is a Sleeping Beauty investment. Not difficult to guess. It is an investment that you can forget about for 100 years and when you wake up, it will have maintained its purchasing power.

GOLD

If we get the expected stock market crash, it is possible that gold and the precious metals continue to correct a bit further like in 2008. As opposed to today, gold had then had a major bull run from $250 in 1999 to $1,000 in 2008. Weak gold hands then needed to get liquidity against a crashing stock market and the everything bubble.

Gold has now been in consolidation for years and there are a lot fewer speculative  investors compared to 2008. Therefore I expect a much smaller and shorter correction, if any.

Coming back to the Sleeping Beauty, there is one investment which you could safely put away and forget about for 100 years. It is of course physical gold, safely stored.

As long as you store gold in a safe place and safe country, you know that it will maintain  its REAL value as it has for 5,000 years.  Yes, there are fluctuations, but gold’s history tells us that it is not just the only money which has survived but also the only money which has maintained real purchasing power. 

Gold today at $1,750 is as UNLOVED AND UNDERVALUED as in 1971 at $35 and in 2000 at $288.

 I will continue to show the chart below until that situation is rectified.

This reminds me of the Roman Senator Cato during the Punic Wars (around 150 BC) who finished every speech in the senate with “Furthermore I consider that Carthage must be destroyed”.

In the end Cato got his way as Carthage was destroyed.

I have no doubt that gold will soon rectify the current undervaluation and reach levels that few can imagine. This is what both technicals and fundamentals are clearly indicating.

Tyler Durden
Thu, 09/23/2021 – 06:30

Author: Tyler Durden

Share this article:

Energy & Critical Metals

The Ethical Investor: ESG moves, lessons from the energy crisis and JP Equities’ stock tips

The Ethical Investor is Stockhead’s weekly look at ESG moves on the ASX. This week’s special guest is JP Equity … Read More
The post The Ethical…

Share this article:

The Ethical Investor is Stockhead’s weekly look at ESG moves on the ASX. This week’s special guest is JP Equity Partners’ director and partner, Nic Brownbill.

The world is in the grip of an ongoing global power crisis that has seen energy prices soaring by thousands of percentage points.

From China to Europe and now India, the cost of energy is surging drastically. The price of natural gas has even quadrupled in some parts of the world.

 

Source: IEA via Reuters

 

But economists are now warning this might be just the first of many power crunches the world will see as we transition into the new economy.

According to a research paper by CommBank’s analyst Vivek Dhar, there are two main root causes that led to the crisis — a strong demand recovery from the pandemic, and an acute shortage of two key power-producing fuels – natural gas and thermal coal.

As economies reopen, there is a sudden pent up demand from consumers which meant that factories were forced to switch on their production capacity at short notice. This was exacerbated by a colder than usual European autumn, as the continent potentially faces a more-freezing-than-usual winter season.

In China, the crisis mainly stemmed from an undersupply in local production of coals, according to Dhar, adding that coal supply has been hampered in China because of the government’s own environmental protection regulations.

So what can we learn from all this?

Dhar reckons that we are transitioning into the new economy too fast, too soon.

“What the recent energy crisis has shown is that the energy transition needs to be planned carefully,” Dhar wrote.

“This will mean significant investment in renewable generation, batteries, electricity grids and hydrogen.”

But he thinks the roll-out of a decarbonised grid and role of gas need to be clearly defined too.

“Under-investing in gas infrastructure relative to its role in coming years will only serve to make Europe’s energy market more vulnerable to prolonged gas shortages, and increase dependence on Russia.”

Like Europe, China’s decarbonisation ambition will need to be planned as well, Dhar said.

“If coal mines and coal power plants are closed before a renewable replacement is in place, power shortages in China could be an ongoing concern.”
 

What’s happening in Australia

Australians have chosen climate change as the top ESG priority, according to the latest survey conducted by global ESG consultant, SEC Newgate.

And more than half of the 1,000 Aussies surveyed said they were happy with the direction the government is taking on the environment.

ESG Rio
Source: Survey by SEC Newgate

 

Aussie respondents also nominated retailers Coles Group (ASX:COL) and Woolworths (ASX:WOW) as the top local companies when it came to doing well on ESG metrics.

These results should provide food for thought for PM Scott Morrison, who’s currently caught in a political wrangle with the Nationals in setting our 2050 climate goals.

The PM has told Liberal colleagues that he wants to bring a binding 2050 net zero commitment to the COP26 Summit in Glasgow next month, without having to upgrade Australia’s 2030 commitments.

Nationals Leader and also Deputy PM, Barnaby Joyce, said however that he was willing to back the 2050 targets only if funding for regional producers and farmers were made as part of the deal.
 

Special guest JP Equities’ Nic Brownbill shares his views and ESG stocks

Nic Brownbill, a partner at JP Equity, told Stockhead that decarbonisation is a mega global investment opportunity, one that JP Equity wants to be all in on.

How big is the potential for ESG investing?

“We see the whole decarbonisation theme as the next mega global investment opportunity. An estimated $41 trillion is required to decarbonise the planet. It’s going to be a bigger opportunity than the crypto market, because unlike cryptos, the carbon market is going to be mandated by governments, major asset managers and pension funds.”

Which segment of the ESG market do you see outperforming?

“Some companies will fall short in trying to make their carbon targets, so the balance will need to be met with carbon credits. I think carbon emissions will eventually be metricated, and the carbon offset market is going to be a way for major companies to offset their emissions.”

Would that investment opportunity catch on in Australia?

“I believe the Australian market hasn’t really caught on to the opportunity of this yet. But I think something will really start to emerge from the COP26 conference in November, where you’ll see a sustained mega theme starting to unfold in this country.

“I think we will start to see a complete emergence of Australian companies in the carbon space over the next few months and beyond.”

What are the ASX stocks that JP Equity likes in the carbon credit space?

One ASX stock that we’ve been watching very closely is  Fertoz (ASX:FTZ). They’re a leading North American fertiliser manufacturer that produces a unique low-emission rock phosphate product that increases crop yield by 15%.

“Importantly, it can generate significantly lower CO2 emissions in manufacturing compared with other commercial fertilisers.

“This presents a really significant opportunity because agriculture as a sector accounts for 24% of all human generated greenhouse emissions. Fertoz is one of the first movers in the carbon credit market, and since May this year has been issuing carbon offset credit certificates.

“It’s not a matter of if, but when disclosure of carbon emissions will become metricated. And as a result, Fertoz is getting some strong enquiries from other companies looking to offset their footprints by buying carbon credits.”

Any other ASX stocks you like in the ESG space?

“We’re also bullish on Mpower (ASX:MPR). The company is Australia’s leading specialist in renewable energy, battery storage and micro-grid business. It has a focus on five megawatt solar farms, and is in the process of creating an initial portfolio of 20 sites across Australia in the coming years.

“That gives them an aggregate capacity of around 100 megawatts, and an estimated value of more than $150 million. It’s now down to what the team can deliver in some of those projects to build up the portfolio.”

 

Notable ASX ESG-related news during the week

Rio Tinto (ASX:RIO)

The energy giant announced that it was targeting a 50% reduction in Scope 1 and 2 emissions by 2030, and a 15% reduction by 2025 from a 2018 baseline of 32.6Mt.

Around $7.5 billion in direct capital expenditure will be spent on decarbonising Rio Tinto’s assets from 2022 to 2030, including $0.5 billion per year from 2022 to 2024.

Strandline Resources (ASX:STA)

The company released its Sustainability Report for 2021, outlining its commitment to the United Nations Sustainable Development Goals (UNSDGs).

STA said it’s focused on managing development risks at its Coburn project in WA to safeguard workers and ensure environmental compliance.

Lithium Power (ASX:LPI)

The company has appointed global consulting firm Deloitte to ensure a robust ESG program at its Maricunga project in Chile.

Deloitte has been tasked to imbed sustainable protocols in LPI’s lithium extraction operations, and to establish ambitious standards for LPI to become a carbon neutral producer, while keeping high standards on the social aspects.

Jadar Resources (ASX:JDR)

The company also said it has completed its maiden Sustainability Plan, with strategies aligned to the UNSDGs.

 

The views, information, or opinions expressed in the interview in this article are solely those of the interviewee and do not represent the views of Stockhead.

Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.

The post The Ethical Investor: ESG moves, lessons from the energy crisis and JP Equities’ stock tips appeared first on Stockhead.




Author: Eddy Sunarto

Share this article:

Continue Reading

Articles

Emerita Sees Continued Success In Spain

Emerita Resources Corp (TSXV:EMO) continues to report excellent results from the Infanta drill program at its Iberia Belt West Project
The post Emerita…

Share this article:

Emerita Resources Corp (TSXV:EMO) continues to report excellent results from the Infanta drill program at its Iberia Belt West Project in Spain, which hosts three previously identified high-grade deposits: La Infanta, Romanera and El Cura. These are all open for expansion along strike and at depth.

On October 22, the company announced assays for the first step-out drill hole from the Infanta drill program and also the final in-fill drill holes. The significance of the in-fill program was to verify the historical drill results. They will now enable a proper 3D modelling of the deposit and will also provide additional data to be used for future metallurgical testing.

At Infanta, the step-out was conducted to expand the outer perimeter of the deposit, and the in-fill drilling was intended to confirm historical drill data within Infanta’s known mineralization zone. Step-out drill hole IN018 was drilled 40 metres to the west of the historical limits of the deposit and intersected 8.2 metres with a grade of 2.5% copper, 8.7% lead, 17.3% zinc, 223.5 g/t silver and 0.5 g/t gold. A second step-out hole was drilled 50 metres to the west of hole IN018 and intersected two zones of massive sulfide but assays have not been returned yet.

In-fill drill hole IN014 intersected 5.7 metres of 2.4% copper, 7.3 %lead, 13.4% zinc, 225 g/t silver and 0.6 g/t gold. The ongoing geophysical survey, which was suspended along with other exploration activities for the region’s hunting season, is expected to resume by the end of October.

Emerita plans to have five drill rigs operating by the end of 2021 and will include the Romanera deposit, El Cura, and other targets identified by previous geophysics work. The two drills currently on site will now focus on step-out drilling to increase the size of the deposit.

Emerita also recently provided investors with an update on the legal proceedings for the Aznalcóllar Project and the company is expecting a ruling by the Administrative Court of Andalucia in Emerita’s favour in the near future.

The Aznalcóllar Zinc Project is located in the prolific Iberian Pyrite Belt in the Andalusia region of southern Spain and is considered to be one of the world’s largest and most productive volcanogenic massive sulfide (VMS) structures. It has been mined for over a thousand years and has produced over 2000 million tons of ore.

Aznalcóllar is considered to be one of the world’s top undeveloped zinc deposits, and the project is essentially a world-class pre-production development asset. Here, the main deposit is referred to as Los Frailes, which contains a historical open pit mineral resource. Two other deposits exist on the property as well, which require further development. The Los Frailes mine operated during the 1990s until it closed due to a combination of tailings-related environmental failure and low metal prices.

After the Aznalcóllar site was rehabilitated, the government initiated a public tender process for the rights to the project and it was initially awarded to another major mining company, however Emerita believed that their bid was superior. It subsequently requested an investigation into the tender process for the property and filed a lawsuit in 2015.

In early 2021, the Spanish court concluded that the process was fraught with corruption, fraud and other malfeasance and rescinded the rights that were awarded and criminal charges were sought for the perpetrators and their enablers. In July 2021, a Spanish judge issued additional criminal indictments against the mining company and government officials who participated in undermining the public tender process for the project.

Under Spanish law, if a crime was committed during the tender process, the rights are then awarded to the next best qualified competing bid, which in this case was Emerita. Subsequently, Emerita has been waiting for the Administrative Court to conclude the process to formally award the rights to the Aznalcóllar Project to the company, which brings us to present day.

The company is planning to develop the deposit into an underground mining operation focused on mining the high-grade zones, which are estimated to contain 20 million tonnes at a grade of 6.65% zinc, 3.87% lead, 0.29% copper and 84 ppm silver. As a requirement of the project’s public tender process, Emerita submitted comprehensive. engineering, environmental and water management studies to the government, and now the company is expecting to be given the green light to proceed developing the Aznalcóllar project into an eventual producer.

Emerita is well financed, having completed a $20 million bought deal private placement in July 2021. Emerita has 182.42 million shares outstanding and due to the recent increase in the Company’s share price, a market capitalization now of $556.38 million. Even so, barring any unforeseen negative developments regarding the legal issues, Emerita Resources Corp still appears to be potentially undervalued relative to the potential value of the world-class assets it is developing.

Shares of Emerita Resources Corp last traded at $3.05.


FULL DISCLOSURE: Emerita Resources is a client of Canacom Group, the parent company of The Deep Dive. The author has been compensated to cover Emerita Resources on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.

The post Emerita Sees Continued Success In Spain appeared first on the deep dive.







Author: Phil Gracin

Share this article:

Continue Reading

Economics

Von Greyerz: Shortages & Hyperinflation Lead To Total Misery

Von Greyerz: Shortages & Hyperinflation Lead To Total Misery

Authored by Egon von Greyerz via GoldSwitzerland.com,

At the end of major…

Share this article:

Von Greyerz: Shortages & Hyperinflation Lead To Total Misery

Authored by Egon von Greyerz via GoldSwitzerland.com,

At the end of major economic cycles, shortages develop in all areas of the economy. And this is what the world is experiencing today on a global basis. There is a general lack of labour, whether it is restaurant staff, truck drivers or medical personnel.

There are also shortages of raw materials, lithium (electric car batteries), semi-conductors, food,  a great deal of consumer products, cardboard boxes, energy and etc, etc. The list is endless.

SHORTAGES EVERYWHERE

Everything is of course blamed on Covid but most of these shortages are due to structural problems. We have today a global system which cannot cope with the tiniest imbalances in the supply chain.

Just one small component missing could change history as the nursery rhyme below explains:

For want of a nail, the shoe was lost.
For want of a shoe, the horse was lost.
For want of a horse, the rider was lost.
For want of a rider, the battle was lost.
For want of a battle, the kingdom was lost.
And all for the want of a 
horseshoe nail
.

The world is not just vulnerable to shortages of goods and services.

BOMBSHELLS

Bombshells could appear from anywhere. Let’s just list a few like:

  • Dollar collapse (and other currencies)

  • Stock market crash

  • Debt defaults, bond collapse (e.g. Evergrande)

  • Liquidity crisis  (if  money printing stops or has no effect)

  • Inflation leading to hyperinflation

There is a high likelihood that not just one of the above will happen in the next few years but all of them.

Because this is how empires and economic bubbles end.

The Roman Empire needed 500,000 troops to control its vast empire.

Emperor Septimius Severus (200 AD) advised his sons to “Enrich the troops with gold but no one else”.

As costs and taxes soared,  Rome resorted to the same trick that every single government resorts to when they overextend and money runs out – Currency Debasement.

So between 180 and 280 AD the Roman coin, the Denarius, went form 100% silver content to ZERO.

And in those days, the soldiers were shrewd and demanded payment in gold coins and not debased silver coins.

Although the US is not officially in military conflict with any country, there are still 173,000 US troops in 159 countries with 750 bases in 80 countries. The US spends 11% of the budget or $730 billion on military costs.

Since the start of the US involvement in Afghanistan, Pentagon has spent a total of $14 trillion, 35-50% of which going to defence contractors.

Throughout history, wars have mostly started out as profitable ventures, “stealing” natural resources (like gold or grains) and other goods–often due to shortages. But the Afghan war can hardly be regarded as economically successful and the US would have needed a more profitable venture than the Afghan war to balance its budget.

US HOPELESSLY BANKRUPT  – NEEDS TO BORROW 46% OF BUDGET

The US annual Federal Spending is $7 trillion and the revenues are $3.8 trillion.

So the US spends $3.2 trillion more every year than it earns in tax revenues. Thus, in order to “balance” the budget, the declining US empire must borrow or print 46% of its total spending.

Not even the Roman Empire, with its military might, would have got away with borrowing or printing half of its expenditure.

TOTAL MISERY AS MR MICAWBER SAID:

As Mr Micawber in Charles Dickens’ David Copperfield said:

‘Annual income 20 pounds, annual expenditure 19 [pounds] 19 [shillings] and six [pence], result happiness. Annual income 20 pounds, annual expenditure 20 pounds ought and six, result misery.’

And when, like in the case of the US, you spend almost twice as much as you earn that is TOTAL MISERY.

Neither an individual, nor a country can spend 100% more than their earnings without serious consequences. I have written many articles about these consequences and how to survive the Everything Bubble

INFLATION IS HERE

The most obvious course of events is continuous shortages combined with prices of goods and services going up rapidly. I remember it well in the 1970s how for example oil prices trebled between 1974 and 1975 from $3 to $10 and by 1980 had gone up 10x to $40.

The same is happening now all over the world.

That puts Central banks between a Rock and a Hard place as inflation is coming from all parts of the economy and is NOT TRANSITORY!

Real inflation is today 13.5% as the chart below shows, based on how inflation was calculated in the 1980s

IMPLOSION OR EXPLOSION

The central bankers can either squash the chronic inflation by tapering and at the same time create a liquidity squeeze that will totally kill an economy in constant need of stimulus. Or they can continue to print unlimited amounts of worthless fiat money whether it is paper or digital dollars.

If central banks starve the economy of liquidity or flood it, the result will be disastrous. Whether the financial system dies from an implosion or an explosion is really irrelevant. Both will lead to total misery.

Their choice is obvious since they would never dare to starve an economy craving for poisonous potions of stimulus.

History tells us that central banks will do the only thing they know in these circumstances which is to push the inflation accelerator pedal to the bottom.

Based of the Austrian economics definition, we have had chronic inflation for years as increases in money supply is what creates inflation. Still, it has not been the normal consumer inflation but asset inflation which has benefitted a small elite greatly and starved the masses of an increase standard of living.

As the elite amassed incredible wealth, the masses just had more debts.

So what we are now seeing is the beginning of a chronic consumer inflation that most of the world hasn’t experienced  for decades.

THE INEVITABLE CONSEQUENCES OF CURRENCY DESTRUCTION

This is the inevitable consequence of the destruction of money through unlimited printing until it reaches its the intrinsic value of Zero. Since the dollar has already lost 98% of its purchasing power since 1971, there is a mere 2% fall before it reaches zero. But we must remember that the fall will be 100% from the current level.

As the value of money is likely to be destroyed in the next 5-10 years, wealth preservation is critical.  For individuals who want to protect themselves from total loss as fiat money dies, one or several gold coins are needed.

So back to the nursery rhyme:

For want of a nail gold coin, the shoe was lost.
For want of a shoe, the horse was lost.
For want of a horse, the rider was lost.
For want of a rider, the battle was lost.
For want of a battle, the kingdom was lost.
And all for the want of a horseshoe nail gold coin.

Gold is not the only solution to the coming problems in the world economy. Still, it will protect you from the coming economic crisis like it has done every time in history

And remember that if you don’t hold properly stored gold you don’t understand:

  • What happens when bubbles burst

  • You are living in a fake world with fake money and fake valuations

  • Your fake money will be revalued to its intrinsic value of ZERO

  • Assets that were bought with this fake money will lose over 90% of their value

  • Stocks will go down by over 90% in real terms

  • Bonds will go down by 90% to 100% as borrowers default

  • You lack regard for your stakeholders whether they are family or investors

  • You don’t understand history

  • You don’t understand risk

The 1980  gold price high of $850 would today be $21,900,  adjusted for real inflation

So gold at $1,800 today is grossly undervalued and unloved and likely to soon reflect the true value of the dollar.

Tyler Durden
Sat, 10/23/2021 – 14:30











Author: Tyler Durden

Share this article:

Continue Reading

Trending