The US Constitution’s Article I, Section 8 mandates Congress to define official standards of weights and measures, implying that money should be an unvarying measure of value to facilitate daily transactions and establish a common currency across the 13 former colonies.
Thomas Jefferson’s 17-page essay on establishing a money unit for the US emphasizes that sound money should work for the average person, be familiar, facilitate daily transactions, and establish a common currency across the 13 former colonies.
Deliberately targeting 2% inflation over 10 years is equivalent to a 1% devaluation or expropriation of savings, as if people had just saved their money under the mattress.
The Federal Reserve’s mandate of stable prices was originally defined as 0% inflation, not 2%, implying that targeting 2% inflation is a form of chiseling or expropriation of savings.
The US government has a moral obligation to provide dependable money that works for the average person, not just financiers, as it imposes legal tender laws and should uphold the constitutional and moral implications of sound money.
Central banks are buying gold as a safe-haven asset due to the weaponization of the US dollar and inflation of major fiat currencies, which are structurally unmanageable due to massive deficits and soaring interest costs.
The backwardation in silver, where the spot price is above the one-year futures contract price, indicates tight supplies and spooked investors willing to pay up for immediate delivery, potentially preceding higher prices.
The death of the fiat currency experiment is a long-term story for precious metals, with gold and silver becoming obvious winners when major currencies cease to function, potentially leading to a chaotic reset to a gold standard or new system.
Silver’s rally is driven by tight supplies, industrial demand from solar panels, electric cars, and missiles, and a big deficit, potentially leading to panic buying and triple-digit prices like $100/oz.
The gold bull market is pulling silver along like a slingshot, with silver outperforming gold in percentage terms, and industrial demand for silver accelerating due to the global arms race and increasing popularity of electric vehicles and solar panels.
Mining stocks are in the “100% club”, having doubled in the last year, with the next quarterly earnings season expected to be the best ever due to gold and silver price increases in Q3 relative to Q2.
A silver squeeze is possible in the next year or two, with a $100/oz price target being reasonable given various demand sources and supply limitations, and real panic buying has barely started.
The ascent of gold in dollar terms could end with a reset to a gold standard or new system, depending on the wisdom and stress levels of those in charge, potentially leading to extreme consequences like civil war if they resist giving up the power to create money out of thin air.
Gold serves as a wealth preservation tool and hedge against economic uncertainty, not a speculative investment or get-rich-quick scheme.
The permanent portfolio, featuring gold as a key component, has provided a 9% annualized return over 50 years, only slightly underperforming equities.
Foreign central banks are driving gold’s price rise by preferring it over US treasuries, indicating strong demand even at high prices.
Gold’s price increase is linked to the dollar’s decline, which is putting pressure on the entire financial system.
Gold is overbought on a monthly basis, more so than in early 2021, 2013, and 1980, suggesting a potential pullback.
The 50-day moving average for gold is around $3680, with expectations of fluctuations around this level in the near term.
Gold’s value proposition remains timeless and unchanging, serving as a strategic portfolio component that pays off when needed.
The current gold price surge indicates systemic economic issues, prompting closer examination of the broader financial landscape.
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