According to the best minds on Wall Street, the economy will take one of two directions.
Number One: The combination of the massive debt bubble popping along with the economic shutdown caused by the virus is going to allow deflation to dig in its heels.
This scenario, which might look like 1929, spells big trouble for the stock market and real estate market. In this environment, the one asset that will maintain its purchasing power is gold.
Number Two: The economy jumps into hyper-inflation, as a result of the tens of trillions of dollars coming our way.
The stock market would initially benefit from this scenario, but ultimately crash as interest rates inevitably rise. The US dollar would get clobbered. And again, gold would thrive long term in this situation.
The first quarter is now over and for those of you with the courage to look at your 401K statements, it’s not going to be pretty. And, adding insult to injury, this could only be the beginning. For those of you that instinctively know something is terribly wrong, but continue to HOPE the market will turn around, good luck. In forty years of investing, I’ve learned that “hope” trades rarely work out. And, the stakes in this case are particularly high. Are you willing to risk everything built up over the last ten years? Over a lifetime? Does it not make sense to take some form of action to protect yourself in this time of incredible uncertainty?
On another positive gold note, the COMEX gold exchange is scrambling to cover the fact they don’t have the physical gold in inventory. The massive drop in “Open Interest” for gold and silver suggests the “weak longs” have liquidated and the big “short” JP Morgan has covered as well. In other words, the decks are clear for gold and silver to resume going back up. And, finally, the physical gold market is tight and strong and relentless. All indications point to higher physical gold to come. So, if gold makes sense to you, why wait? Gold Prices are only going higher, and as time goes by, availability will only continue to diminish.
