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GOLD FINALLY BOTTOMED: WHERE WERE YOU?

Contributing Author
April 5th, 2021
The Wealth Research Group
Comments (5)

This article was contributed by The Wealth Research Group. 

It literally takes five minutes to fact-check that gold and CPI (Consumer Price Index) or the PCE (Personal Consumption Expenditures) don’t correlate with each other. Said differently, gold and inflation aren’t two peas in a pod.

Gold tracks real interest rates, of which inflation stats are 50% of the equation, with bond yields being the second half. The way to calculate real rates is by deducting inflation from the 10-yr Treasury yield. When the subtraction comes out negative, gold’s relevance is, by far, higher than at any other time, since it becomes disadvantageous to hold cash.

In the chart below, you’ll see nearly eighteen years of the 10-Year Treasury yield, adjusted for inflation:

The first thing you’ll notice is that it is currently negative. The last time it was such, gold peaked at over $1,900 in September 2011 and again at $2,069 on August 6th, 2020.

In other words, there is compelling reasoning behind the thesis that August’s rally to an all-time high above the elusive $2,000 was it, that it was the peak, and that we’ve entered a bear market again.

On the other hand, if we compare this period to 2008 and 2009, we can see that back then, the dollar went into the crisis already weak, after it was beaten down by the Japanese Yen and the Euro in the early 2000s.

So, when comparing the two periods, the first decade of this millennia saw a weak U.S. economy, compared with other nations, whereas the coronavirus crisis happened in the midst of an American boom period.

If anything, the 2020 pandemic resembled more of the 1990’s boom, which changed with 9/11 and the Twin Towers tragedy.

Incidentally, there was a regime change from Democrats to Republicans, from peacetime to war, from free markets to more government intervention, but Greenspan’s ZIRP policy caught America unprepared.

To summarize, the dollar was really strong, going into the Dotcom bubble, just as it was, going into March 2020. The market crash might have helped bring a regime change in both cases and, in both cases, the dollar got weak right after.

The demographics in the 2000s did not support a housing boom, so the artificially low rates only served to entice the wrong people to originate a mortgage, forcing banks to take on risks they otherwise would not have, had the FED kept rates normal.

Today, it seems like the housing market is strong and has legs to run, creating velocity of money again.


Courtesy: Zerohedge.com

As you can see, every once in a while, the bond market begins to tell itself a story of epic inflation, due to the easy-money policies, excessive deficits, and a myriad of additional factors, which it convinces itself are sure to bring an inflationary spiral.

Q1 of this year was horrible for bond prices since yields rose ferociously.

The 10-yr bond, which is the barometer of the asset universe, has soared by 85%, from just over 0.9% to 1.7% today.

Those who lent funds to Washington in early January have lost 53%!


Now, it is up to you to decide, whether you are about to allow the same people who have poisoned the well, basically since 1971, to brainwash the masses into thinking the world is coming to an end for the gazillionth time, scaring their followers out of owning stocks or getting into real estate, falsely chasing returns by piling endlessly into cyclical commodities, or if you are instead going to stay leveled, putting a portion of your savings into precious metals – not instead of investing, but on top of it!

Not Biden, nor Jerome Powell, and not even your favorite guru that you believe has the pulse and beat on the markets, can change one iota from this truth: equities and real estate are wealth generators.

As long as entrepreneurship and brainpower aren’t banned in this country, building, running and owning businesses and real estate in the booming areas, will always find a path to outperform any and all governmental stupidity or inefficiency.

Gold has bottomed, massive inflation is nowhere in sight and you must act.

 

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    Author: Contributing Author
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    Date: April 5th, 2021
    Website: https://www.wealthresearchgroup.com/

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    5 Comments...

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    1. Andrea.Iravani. says:

      Russia sends memo to NATO. Knock it off, or we’ll do it for you. Russia’s next president will undoubtedly have much less patience than Putin has with NATO. I honestly think that Putin must be the most patient person on earth. He has been patiently waiting for NATO to grow up for his entire career.

      https://sputniknews.com/military/202104051082543315-moscow-not-ruling-out-military-measures-in-response-to-missile-threats-arising-from-the-west/

      Andrea Iravani

      • Anonymous says:

        What does your post have to do with GOLD?

        Much like most of your habitual postings, they are constant useless drivel and banter of a bi-polar delusional individual.

        Please seek help – Currently, your mental health is your own worst enemy. You may not notice it, but everybody else does.

        • Andrea.Iravani. says:

          Do you honestly need to ask what it has to do with the price of gold? Are you seriously that inept?

          Please, seek medical help for your mental retardation. You may not notice it, but everyone else does.

          Andrea Iravani

    2. Andrea.Iravani. says:

      American and Scottish Sputnik radio show hosts, Unz, Saker, and GlobalResearch contributors have all acknowledged that propaganda causes war. The question is, why is it that they are propagandizing on behalf of the CCP? Their propaganda on behalf of the Chinese Communist Party has most likely contibuted to other European, Asian, and African nations signing onto the Belt Road Initiative, as well as the debt enslavement of the nations that have to the CCP in contract agreements as far reaching as the CCP building infrastructure projects including 5G, the CCP management and oversight of data and intelligence collecting through Hauweii, the CCP controlling foreign policies of nations under contract, and the CCP pillaging natural resources from the countries under contract in the Belt Road initiative.

      These western propagandists for the CCP attempt to convince people that any warranted criticism of the CCP is fuel for war whether it is for the United States or the CCP to use as a reason to go to war. 

      I refuse to be intimidated by such nonsense, Why is it that they refuse to take their own advice and continue regurgitating CCP propaganda knowing full well that propaganda is fuel for war? 

      Are they begging for war? It would appear to be so when their own statements line of reasoning is applied to their own statements.

      Sputnik Radio show hosts, Global Research,  The Saker, and Unz contributors have so many writers that are so pro-China that the truth is about what is taking place in China is being MASKED in silence by the Alt Right and Alt Left. Both the Alt Right and Alt Left have been pro-Russia. Russia and China are two extremely different countries. The alliance between Russia and China is a marriage of convenience, that probably would be far less cooperative if it were not strictly for the purpose of Russia trying to survive, the U.S. antagonistic false allegations and sabotage of every effort that it makes. Realistically speaking, this is in large part directly related to Russian military operations in Syria and Russian weapons contracts in the Near and Middle East. The Russians embarrassed the hell out of NATOs false flag operations. Europe has also been complicating matters for any U.S. Russian alliances for the reasons of its own self preservations. The EU tells the U.S. that they are threatened by Russia, asks for military support, and even says that Russia is the world’s largest threat to security, but is also installing the NordStream 2 pipeline. I am not suggesting that Europe drop the NordStream2. I am suggesting that Europe stop saying that Russia poses a security threat. Why would Europe want to install the NordStream2 and pipe gas in from a country that they consider to be a security threat? At European request, the U.S. has surrounded Russia with missiles. Obviously, the U.S. just does it for the money in weapons contracts, which have all completely deteriorated as well, with European countries abandoning F-35s and European countries developing their own missile systems.

      This was obviously a goal to isolate America from all of its allies, one country at a time. America has been grossly antagonistic in many instances that defy all logic as well with sanctioning. The only logical explanation is that the individuals that are making these policy blunders are intentionally trying to destroy America both from within as well as from beyond. They are terrorists and economic hitmen. The policies are in many cases based on total fabrications, as it is with the scamdemic, Russia, Syria, and Iran bashing, and are rabidly pro-Zionist, leaving America as the only country on earth other than Israel that supports the illegal settlements in Israel. American government has also made it more of a crime to criticize the government of Israel or Israeli companies than it is to criticize the U.S. government and U.S. corporations. 

      The important thing to take away from these articles below by Alice Su is how quickly America is becoming like China, and it appears that the other websites that I mentioned approve of the destruction of liberty and total tyranny, the left and the right have different reasons for supporting Chinese tyranny policies, but the outcomes are the same, regardless. It is happening extremely suddenly with vaccine passports, censorship, as well as scores of other things that most people are aware of and oppose, so I will not list all of them.

      https://www.latimes.com/world-nation/story/2020-10-22/china-xi-jinping-mao-zedong-communist-party

      https://www.latimes.com/world-nation/story/2020-07-10/this-is-a-cultural-purge-with-new-security-law-even-blank-paper-is-subversive-in-hong-kong

      https://www.latimes.com/world-nation/story/2020-06-29/hong-kong-national-security-law

      To overlook the fact that China is and has had a long history of this type of oppressive tyranny while simultaneously orchestrating the largest expansion of the the Chinese dynasty in modern history is similar to overlooking the “moderate rebels” placed in power during the Arab Spring, and the devasting and destabilizing consequences that it had on the region. I do not support going to war against China, and have made that extremely clear, but I do not support the colonial expansionism of a country that has ruled by decree and absolute tyranny either, and to propagandize on behalf of a country guilty of those crimes against humanity, and to blatantly ignore it, and to promote China based on propaganda may lead to similar outcomes that supporting the “moderate rebels” in the Arab Spring did. To insinuate that it is ok to deliberately mislead with Chinese propaganda since it is not promoting war, is as misleading as saying that to ignore that the “moderate rebels” were in fact tyrannical terrorists was ok too, since promoting their cause was not promoting war either. It is irresponsible for journalists that have this knowledge of the CCP to gloss over it and pretend that it does not exist, or to try to claim that pointing out CPP tyranny out promotes war, is a war on truth, and a cheap shot rationalization for promoting CCP propaganda. The enemy of my enemy of my friend is a really lame brained world view that typically fails in practice. If the only thing that one party has in common with another party is hatred for a specific party, it is a relationship reliant upon hatred and would disintegrate into nothing once the specific party has either been eliminated or defeated, thereby creating an incentive to keep the party that they have both aligned against on life support for reasons of survival of the relationship, or risk one of the two parties attacking eachother once the specific party has been defeated or eliminated, since they disagree on almost everything else, and are both non-peaceful by their nature since they established a relationship solely based on tyranny or war.

      Andrea Iravani

    3. Anonymous says:

      Who in the hell is this guy talking to with his YOU YOU YOU?
      It must be delusional projection because it certainly isn’t me.