The stock market bubble may burst soon, with gold and silver potentially becoming the only safe havens, according to Michael Oliver of Momentum Structural Analysis.
Historical patterns show that during stock market crashes (e.g., 1974, 2007, 1975), money consistently flows into gold, highlighting its role as a safe-haven asset.
The current 15+ year-old bull market faces a potential major downturn, exacerbated by personal, investment, and corporate spending errors based on the false notion of artificially low interest rates.
The Federal Reserve is expected to inject new capital into the market when faced with negative data points from a stock market top, potentially accelerating gold’s upward movement.
Gold miners are currently undervalued relative to gold, with a 5% spread representing a tripling of the relative value, poised for a potential breakout.
Silver is positioned to outperform gold, with its current 1.14% spread compared to the normal 2%, indicating significant potential for growth according to Michael Oliver.
Nixon’s 1971 abandonment of the gold standard led to persistent inflation, debt accumulation, and a deteriorating US monetary system, requiring a reset to restore stability.
The debt-based monetary system, influenced by John Maynard Keynes, necessitates inflation to function, contrary to the benefits of deflation in a sound money system.
The U.S. dollar is losing its status as the world’s reserve currency, with oil transactions dropping from 95% to 65% dollar-based due to government behavior.
Gold, silver, and Bitcoin are essential sound money solutions to restore stability, fairness, and economic health in the US.
Gold and Bitcoin are the soundest solutions to protect against currency debasement and inflation, with gold tracking inflation since 1971 and Bitcoin offering a digital alternative.
The Lightning Network, a layer 2 solution for Bitcoin, enables microtransactions at low cost and fast settlement, similar to the evolution of cell phones.
Inflation disproportionately harms wage earners, with government-reported rates often underestimating real costs, while the Federal Reserve prioritizes debt servicing over economic fairness.
Crony capitalism benefits the wealthy who know how to play the system, while wage earners struggle as costs rise.
China and Russia are betting on gold and Bitcoin, respectively, as alternatives to the dollar, with China stacking gold and Russia building Bitcoin mining infrastructure.
Transitioning to a sound money system will be painful and messy, with an likely inflationary event as politicians reset the currency to a gold and/or Bitcoin standard.
Political challenges in transitioning to sound money require public awareness and grassroots support for systemic change to prevent a debt crisis.
Owning real assets like gold, silver, and Bitcoin that the government can’t print provides protection against inflationary policies.
Decentralization and alternative media are positive developments that can help restore economic health and fairness, with the internet potentially saving us from centralized systems.
The US dollar’s overvaluation, driven by high interest payments relative to GDP, is unsustainable and likely to weaken materially over the coming year, impacting global markets.
A monetary alignment among central banks to reduce dollar value may be necessary, benefiting emerging markets, developed economies, and natural resources like silver and mining companies.
Fiscal stimulus, averaging 8% of GDP annually post-2008, has been the biggest driver of US economic growth, and its reduction will have a significant delta impact on equity markets, growth, and valuations.
Gold’s historical role as a haven asset is gaining recognition, especially among younger investors, with a cap on US dollar strength providing a green light for gold and its derivatives.
U.S. gold reserves are at a 90-year low, while global reserves are at a 50-year high due to a buying spree since the 2008 financial crisis, with the U.S. now holding only 20% of total gold reserves.
U.S. gold miners have fat margins at nearly $3,000/oz gold price, with median all-in sustaining costs for top 50 miners at half the gold price.
Silver is expected to reach $40-45/oz in the coming months, extremely profitable for miners producing at sub-$15 costs, with potential for a major breakout beyond prior highs.
The commodities to equity ratio at a 60-year low is likely to turn significantly if the U.S. dollar weakens and yields decrease.
Crescat Capital focuses on exploration stocks, offering higher returns at the right cycle time despite being riskier and less liquid, believing most money is made in exploration when a mining cycle is triggered.
Crescat recently purchased a major silver mine, now the 3rd largest globally, with low production costs and high margins, anticipating a significant silver price increase to $30/oz.
Signs of a potential market top include Bitcoin breaking below its price range, narrow market breadth with only a few sectors outperforming, and speculative assets like Fcoin losing 90% of their value since January 19th.
Consumer sentiment is declining, with the latest University of Michigan numbers showing the biggest monthly drop in four years, consistent with recession levels historically.
Gold has broken out of a 10-year cup and handle pattern at around $2,000/oz, potentially running to $3,000/oz, while silver is coiling for a move higher, with targets of $34-38 for SLV.
Gold and silver miners have been building bases, with junior miners up 50% since early last year, potentially catching up quickly if metals continue to rise.
Emerging market bonds and midterm duration bonds were added to the portfolio, with a total of 15% in bonds including a small piece of foreign denominated and emerging market bonds, while short-term treasuries still yield above 4%.
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