Author: Gold News Club

Seeking Alpha/Bert Dohmen/7-17-2020

“Our opinion, and that of millions of people throughout history, reflects a different view [than Buffett’s]. Gold is a store of value. Over the long term, its value is not eroded by central banks creating money artificially. In fact, in terms of paper currency, which is basically paper with ink slapped onto it, gold prices rise over the very long term. In 1975, gold was $35. Now, gold has broken out above $1800/oz. Look at the concept of ‘store of value.’ According to Zillow, a medium-priced house in 1960 in the U.S. was $11,900. The same home now would cost between $700,000 and over $1 million depending on the part of the country. In terms of gold, the house may cost the same as in 1960, using ounces of gold. That’s a store of value!”

USAGOLD note:  Bert Dohmen takes the Oracle of Omaha to task …… Translated to ounces his 1960s medium-priced house cost 340 ounces of gold and today’s cost 385 ounces.

Financial Times/Brendan Greeley/7-15-2020

“'[Cash is] the one asset that people are pretty confident isn’t going to lose value,’ said Eric Rosengren, president of the Boston Fed, in March. “And so people are deciding they’d much rather hold more of their assets in cash.”

USAGOLD note:  Mr. Rosengreen, it would seem, does not fully understand the concept of price inflation, or perhaps he just overlooked it in making this statement. A  ten dollar bill stuck under the mattress in 1971 would have the purchasing power of roughly $1.60 today. The equivalent of $10 in gold (.286 troy ounces) put under the mattress in 1971 would have the purchasing power of almost $519 today (at $1815 per ounce).  Over the long term, cash is cold comfort to the saver …… if its comfort at all.  That is why Ray Dalio, manager of the largest hedge fund in the world, recently said ‘cash is trash’ and recommended a long term holding in the yellow metal instead. It is not difficult to understand, at the same time, why someone might want to keep a fairly substantial emergency stash of the green stuff nearby under current circumstances.

Sources:  ICE Benchmark Administration, Bureau of Labor Statistics, St. Louis Federal Reserve [FRED]

Hedging the decline and fall of a currency
The baseline case for gold hasn’t changed much in 1700 years

Book Review

The baseline case for gold 320 AD

“We sometimes forget that inflation is a process rather than an event. One of the better-known examples of that axiom is the nearly two centuries-long debasement of Rome’s silver denarius – an inflationary episode Jack Whyte, a writer of historical fiction, skillfully addresses in his latest novel, The Burning Stone.

Set in Great Britain in the fourth century AD during the Roman occupation, The Burning Stone is a prequel to Whyte’s engaging, seven-book series on King Arthur – The Camulod Chronicles. Throughout the series, Whyte juxtaposes the rise of Arthur’s Camelot against Rome’s decline. This particular story is told through the lens of a young Roman from a wealthy family with banking, political and military interests who flees to Britain ……”

[LINK to the rest of the story]
…… which includes The baseline case for gold in 2020 AD ……

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In November 2016, Forbes magazine (commonly known as “Forbes”) published an article titled “Four Reasons Why Gold Is A Bad Investment.”  Despite being a business magazine with a stellar reputation, established 1917, they really missed the boat with this article.

November 2016 was a “down” month for gold, trading from $1300 to $1180.  So, let’s average it to $1240.  Today, it’s in the $1820 range, a $580 climb, a 46% upside move.

The author noted all the old, hackneyed digs for gold: “Unlike a bond, the metal pays no interest. There is no dividend. It may not protect you against the worst forms of inflation, which are often in health care. And there is no implicit guarantee that it will appreciate in value.”

He did, though, provide a salient warning:  There are lot of people getting scammed into buying it in various forms.  That is what CMI has been saying for 48 years.  We have never promoted numismatic coins, which carry huge premiums because of their dates and low mintages.

(Follow the getting scammed link for stories of investors who were taken by “bait and switch” tactics, where bullion coins such as Gold Eagles are advertised but so-called collector coins are promoted.)

My main objection to the article is that the author never mentions that gold has been valued in all civilizations for six thousand years, and it has never been VALUELESS.  Further, he fails to mention that the U.S. Treasury lays claim to 8,133.5 tons that are stored at Ft. Knox, KY and in the Federal Reserves vaults in NYC.

Additionally, central banks around the world collectively own 34,904.76 tons

Yet individual investors are told that “gold is a bad investment.”

Gold shines especially when governments enter into loose monetary policies, such as now.

Increase Gold Exposure With Highland Gold Mining  Seeking Alpha

National Labor Relations Board in settlement talks with Nevada Gold Mines after agency accuses it of ‘unlawful conduct’  The Nevada Independent

Resolute adds life at Mako gold mine  www.mining-journal.com

Wall Street Is Throwing Billions at Once-Shunned Gold Miners  Yahoo Finance

1. Gold gains, silver powers to 4-year peak Monday  Kitco NEWS
2. Gold Price Challenges 2011 Dollar Peak, ‘Inflation Returns At Last!’ Say Analysts | Gold News  BullionVault
3. Gold hits highest since September 2011, silver at 4-year peak  CNBC
4. Gold Price Analysis: XAU/USD consolidates gains above $1,800 inside immediate rising channel  FXStreet
5. Citi Says It’s ‘Only a Matter of Time’ Before Gold Hits a Record  Bloomberg
6. View Full Coverage on Google News

Silver marks highest finish since 2016; gold ends higher for a second session  MarketWatch