The massive money creation in the 2000s has led to a debt and asset bubble, which is about to burst. Investors will be shocked by the speed of the decline and won’t react before it is too late…
by Egon von Greyerz on Gold Switzerland:
The massive money creation by central and commercial banks in this century has resulted in a growth of global assets from $450 trillion in 2000 to $1,540 trillion in 2020.

DEBT TO GDP GROWTH
As the chart below shows US debt to GDP held well below 25% from 1790 to the 1930s, a period of almost 150 years. The depression with the New Deal followed by WWII pushed debt to GDP up to 125%. Then after the war, the debt came down to around 30% in the early 1970s.


BIDEN BANS RUSSIAN GOLD
So it is happening again. The US has decided to ban imports of Russian gold and told the whole G7 to follow suit. President Biden sent the following Tweet last week:

SANCTIONS ARE COUNTER PRODUCTIVE
Biden also signed an executive order on 15 March this year, prohibiting US persons to be involved with gold trading with Russian parties.
Still, more sanctions by the US and Europe will over time create shortages in gold just as it has in other commodities. So Russia will be able to sell its commodities including gold to other markets at higher prices.
But since Russia by far has the greatest commodity reserves in the world at $75 trillion, the value of these reserves are going to appreciate for years as we are now at the beginning of a major bull market in commodities.
The US and EU sanctions of Russia affect around 15% of the world population so there are still plenty of markets where Russia can trade.
The Roman Empire controlled parts of Europe, North Africa and the Middle East. The Empire prospered primarily due to free trade within the whole area with no sanctions. Sanctions hurt all parties involved. And since Russia is such a major commodity country that can continue to trade with major nations, they will over time suffer less than the sanctioning countries.
The consequences of these sanctions especially for Europe where many countries are dependent on Russian oil and gas will be totally devastating. So the US and Europe have really shot themselves in the foot.
GOLD, THE US DOLLAR & STOCK MARKETS
Coming back to gold, the US and G7 move is more likely to have a beneficial effect on gold over time with demand increasing and supply being restricted.
Gold started an uptrend in year 2001 that lasted for 10 years to 2011 when gold reached $1,920. After a major correction for 3 years until 2016, to $1,060, gold has resumed its exponential uptrend as can be seen in the chart below.

MAJOR GOLD MOVE COMING
As the chart below shows, gold is finishing a Cup and Handle technical pattern. It does allow for a slightly lower price before the next move up although that is not certain. Regardless, the major trend for gold is substantial and I expect a sustained move up to at least 2026 but probably for much longer. Obviously there will be major corrections on the way.

DOLLAR FALL NEXT
If we look at the chart of the dollar against the Swiss franc since 1970, we can see that the 78% fall so far has gone sideways for 10 years.
The next move down is likely to be another 50% to 0.45-0.50 at least.

The next move down in stocks could happen within the next few weeks. This is likely to be a shocking move which will paralyse investors as they won’t have time to react.

As we bought gold for wealth preservation purposes, it was essential that it was physical with direct ownership and control for the investor. To be able to inspect your own gold is also a requirement.
It is also imperative to store the gold outside an increasingly fragile financial system. If you buy gold as insurance against such an over-leveraged and weak system, it obviously serves no purpose to store it within that system.
To store your insurance asset in a safe jurisdiction is clearly critical. Especially with the current geopolitical unrest it is essential to take advice on location. Also important is to be able to move the gold quickly if necessary.
The reputation and values of the company that assists you with your gold investments must be impeccable.
It serves no purpose to make your choice based on the lowest cost of storage, insurance and handling when you are protecting one of your most important assets.
BE CAREFUL
So there are likely to be major moves in markets next.
No one can of course time these moves exactly. But what is critical to understand is that risk is now extremely high and investors are not going to be saved by central banks.
And remember that fire insurance can only be bought before the fire starts!
Free Report: Top 5 Gold Stocks for a Bear Market
There’s still plenty of upside ahead for gold stocks.
Goldman Sachs says gold could run to $2,500 by the end of the year-especially with fears of a potential recession. And, according to Jeff Currie, Goldman Sachs global head of commodities research, as quoted by Bloomberg, “It’s a perfect storm for gold right now.”
So, where should we invest? Try these.
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