Sometimes it looks like we’re living inside of this giant experiment, but it’s not a lab – this is real life, and every action has an equal and opposite reaction.
For starters, when you detach currencies from tangible items, you run the risk of permanent inflation. Gold has been a sign of monetary stability for thousands of years, and silver was the most common means of exchange for everyday people.
Today, gold is what governments and central banks hoard. People who live in countries with engrained cultures of precious metal heritage do as well, such as China and India, but in Europe or the U.S., you’d be hard-pressed to find a middle-class family that is fully educated on its history, role, and benefits.
With my own children, I will teach them these basic facts because I want to make sure they don’t fall prey to global trends that can completely decimate their chances for prosperity in life without them even knowing what’s happening.
The Bernanke bullshit days are over – central banks are certainly buying gold.
It’s incredibly easy to understand their strategy: sell into the market when it’s getting too high in order to put a lid on prices and buy back when fiat dollars are able to support more ounces (when gold is undervalued).
The FOMC minutes released yesterday all point to their gradual hiking plans continuing in light of a strong U.S. economy.
In the big picture, the trajectory is quite clear. The engine of the U.S. economy is domestic business, not multinational companies.
In other words, I see continued success for the local businesses that rely mostly on the national market, but the international scene is getting overvalued.
The higher the interest rates go, the more this economy will resolve its imbalances. Said differently, expect to see a lot of money flowing into sectors that have been ignored thus far.
This is not 2008. We are not in a cash-poor, highly-leveraged world. We are in a cash-rich, unbelievably-leveraged world.
The ramifications are that we’re not at risk of a credit crunch, but rather a runaway inflationary bubble.
As we have noted many times before, having risk doesn’t mean it is imminent.
I want to be clear that I’ve not invested in gold and silver in 2018 yet, but depending on how July and August go, there could be room to build a Bargain Hunting Portfolio of 10 mining stocks. I’m working on finalizing our all-star list, which will be ready by the end of summer.
In the meantime, our No. 1 focus and main objective is cannabis.
The industry is just getting off the ground, and I have a feeling that the U.S. will not wait for long before they legalize as well.
I’m preparing the most detailed cannabis alert we’ve ever published for Tuesday the 10th.
Research Partner, PortfolioWealthGlobal.com