The next decade (2023-2032) will be challenging, with the US dollar potentially losing 75% of its purchasing power due to $36 trillion on-balance-sheet liabilities and $und00 trillion off-balance-sheet entitlements growing by $2 trillion annually.
The gold price could increase 4-fold if the US dollar loses 75% of its purchasing power, mirroring the 1970s pattern when gold served as a store of value during economic uncertainty.
Market share of precious metals in the US economy is currently 0.5%, down from a 4-decade mean of 2%, suggesting that allocations below 10% in precious metals for those who can afford it are imprudent given potential economic challenges.
Intelligent securities analysis focusing on value creation, not price momentum, is key to achieving 20%+ compound annual returns in stagnant markets, as demonstrated by Warren Buffett’s 1968-1982 performance.
The bull market in precious metals is following a textbook progression from gold bullion to silver to miners to junior silver stocks, with value discrepancies becoming more apparent between top companies and smaller ones.
Serial outperformers like Robert Friedelland, Lundine, Ross Bee, and Bob Quartermain are crucial for identifying high-performing investments, while avoiding “lame, halt, and blind” stories is essential for discipline and success.
The gold bull market began slowly but validated narratives in 1970-1975 with a six-fold price move from $35 to $200 an ounce, attracting investors after the move rather than before.
During the greatest gold bull market, the gold price fell by 50% while the bull market remained intact, suggesting potential for a similar four-fold nominal price increase in the next 10 years, followed by a 50% fall.
The uranium juniors were stupidly oversold six months ago, prompting Rick Rule to add a trading position before selling when sentiment improved and redeploying capital into the gold sector.
The Canadian oil and gas industry, particularly in the Western Canadian Sedimentary Basin, is potentially more favorable than the US due to political conditions and being under-drilled relative to the Permian basin.
Rick Rule emphasizes the importance of understanding the economy through resources like Hasllett’s “Economics in One Lesson” and focusing on value creation for making money and thriving in the upcoming challenging decade.
Rick Rule’s Battle Bank is a unique service providing lending products secured by physical gold and silver, with 17,000 people on the waiting list and 6,000 wanting to post physical collateral for credit lines.
The US economy is experiencing a stagflationary environment with rising inflation and weakening growth, creating a challenging situation for the Fed and a poor outlook for stocks and bonds.
OECD and IMF have reduced their global growth outlooks, indicating a widespread stagflationary trend beyond just the US economy.
The US labor market is weakening, with slowing private sector job growth and increasing layoffs in the tech sector due to rising AI costs, while the shrinking labor force acts as a long-term inflationary force.
The Buffett indicator (GDP vs market cap) is at an all-time high, signaling extreme financialization of the economy, with Buffett himself holding a record $350 billion in cash due to lack of opportunities.
The equity risk premium is at its lowest since the dot-com bubble, suggesting stocks are pricing in an unlikely return to ultra-low interest rates despite sustained inflation.
A monetary regime change is underway, indicated by the dollar rapidly devaluing relative to gold, which typically leads commodity price increases.
The Japanese yen is extraordinarily undervalued, with institutional investors taking massive positions in anticipation of its strength as the Bank of Japan normalizes interest rates.
Oil is significantly undervalued relative to gold, making energy stocks an attractive investment opportunity, having generated a 30% average annual return over the last 5 years.
The US dollar is overvalued and likely to generate poor returns over the coming decade, with its weakness predicted by its current valuation.
The “inside” of the stock market, referring to economically sensitive sectors, has been weak during the rally, serving as a warning sign about the economy’s health.
The Fed is in a difficult position, unable to cut rates due to inflation concerns or raise them amid rising unemployment, complicating their response to the stagflationary environment.
LA riots expose a two-tiered enforcement system in California, where laws are enforced in wealthy areas but neglected in poor and working-class neighborhoods.
California’s “compassion-based policies” have dismantled public order, with leaders using compassion as a justification to abandon law enforcement.
The pandemic period revealed stark contrasts, with draconian measures imposed on ordinary citizens while elites maintained normal lives, highlighting authoritarian tendencies.
California’s addiction crisis is viewed as a spiritual disease requiring radical spiritual solutions like abstinence and community support, rather than harm reduction.
Michael Shellenberger suggests the chaos in California could lead to a spiritual transformation, connecting people through “grace of God”.
California is experiencing multiple simultaneous realities, with different groups facing varying levels of freedom and oppression, necessitating a comprehensive solution.
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