June 27, 2016

Like a kick in the face

For any precious metals investor who isn't a lightning fast HFT robot or the Bank of Nova Scotia, investing in Gold has been a proverbial and perpetual kick in the face.

But this might be ending ...

Here's all of the reasons why
  1. Top US banks are now offering essentially 0% down mortgages. This is as, if not more risky than the subprime stuff that nearly tanked the global economy.
  2. Foreign Central Banks are dumping US debt at the fastest rate since the 70s.
  3. Central banks (except Canada ...) are still net buyers of Gold.
  4. China now has one of the largest Gold exchanges in the world.
  5. Smart money has been moving away from Riskier high yield bonds toward safer assets to the tune of billions of dollars in the last few months.
  6. Brexit happened. This is a black swan sort of event in the sense that there is a lot of uncertainty now that the UK is officially out. Conservative economists are screaming bloody murder over Brexit.
  7.  Debt to GDP ratios in just about every developed nation is utterly insane. Japan is up over 400%, the US is close to 200%, Greece and Ireland are up to 300%. It was thought that at 120%, your country's currency would collapse. Perhaps in the new math of the global economy, this is no longer the case. If all of the big players are adding debt liberally, then debt will perhaps become the new normal (or I'm thinking that's the hope). Perhaps the debt numbers will get so utterly massive that they will become an irrelevant abstraction. Perhaps they already are.
Each of these things leads me to believe that Gold is in prime position for a huge run.