Central banks have become major gold buyers in recent years, driving prices from $1,800 to $3,500 per ounce as part of a long-term derisking strategy against the $37 trillion US debt.
The weaponization of the dollar by Western countries, including seizing $350 billion in Russian assets, has prompted a global shift back to gold as a tier one asset under international banking rules.
The US national debt, currently at 140% of GDP, is becoming unmanageable, with a significant portion of income tax going towards interest payments.
China’s industrial dominance, producing 14 times more steel than the US annually, and its control over critical materials like rare earths, tungsten, and antimony, pose significant challenges for Western economies and military applications.
The US and Canada have untapped critical mineral deposits, but developing them into producing mines would take 5-15 years due to regulatory and logistical challenges.
There are no viable substitutes for China’s rare earths, tungsten, and antimony in high-performance magnets, electronics, and aerospace products due to their unique nuclear and electron structures.
Gold mining shares have lagged behind rising gold prices, creating investment opportunities in this neglected sector with few big money players.
Mining companies are reporting record earnings at $3,300/oz gold, up from $1,400/oz planning price, with profits being directed towards dividends, buybacks, and M&A of underappreciated assets.
Investors should look for companies with Tier 1 assets (5M+ oz gold), strong management teams, and resources worth exploring further.
Chinese EVs are threatening North American automakers with low-cost alternatives, while Chinese battery technology is driving global EV adoption.
The energy transition is actually an energy addition across all sectors, with traditional energy sources still increasing alongside renewables.
Hard assets like gold, silver, and copper should be part of investment portfolios, with the mining space offering opportunities in precious metals and copper.
Antimony and tungsten present promising investment opportunities due to their critical applications and limited supply outside of China.
Western universities stopped teaching about the gold standard in the early 1970s, despite gold still being considered money in much of the rest of the world.
The US economy may have passed the point of no return due to a collapsing consumption base (70% of GDP), rising geopolitical tensions, and an increasingly fragile treasury market.
The revival of American manufacturing is largely a myth, as the US has been exporting its middle-class jobs to countries with cheaper labor, following a pattern seen in previous Western Christian empires.
The US is at the precipice of recession, with downward revisions to 2024 data suggesting the recession has been ongoing, and companies cutting costs through layoffs and reduced spending.
The US is in a more fragile state than past empires due to its dependence on foreign debt, rising national debt, and declining economic competitiveness.
To create a strategic manufacturing base for high-tech industries like semiconductors and quantum computing, the US needs to strengthen manufacturing ties with allies such as Canada and Mexico.
China’s trend of gravitating towards short-term treasuries is a strategic move to hedge its exposure to US debt, potentially making US fiscal standing extremely volatile if other countries follow suit.
The US may see a massive expansion of the money supply as a tool to stimulate the economy, potentially leading to double-digit inflation and a loss of purchasing power of the US dollar.
A cataclysmic recession may occur following the consumption collapse, unless an unforeseen event such as a productivity boom occurs.
The US should focus on building alliances with known allies to move manufacturing away from sovereign economic enemies like China, rather than penalizing automobile manufacturers for their sunk costs.
The US needs to address its trade relationship with Canada and Mexico to create a strategic manufacturing base for high-tech industries.
Gold futures reached an intraday high of $3,510, with prices increasing by nearly $100 in two days, contradicting initial overbought market concerns.
Goldman Sachs predicts gold prices to reach $4,300 this year, with a base case of $3,700 and a worst-case scenario of $3,900 in a recession.
The dollar’s value has decreased by 66.7% against gold over the past 50 years, driven by the need to service debt buildup through inflation.
Investors are shifting from dollar-based assets to alternatives like gold and Bitcoin, with the mining sector poised to benefit from increasing gold prices.
The GDX ETF, representing the mining sector, has a market cap of only $16 billion, indicating potential growth as investors allocate funds to companies like Newmont and Agnico Eagle.
Bitcoin’s price has rebounded after a recent breakdown, following NASDAQ and stock market trends, positioning itself as an alternative to dollar-based assets.
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