If you want to put yourself in a position where you can relax and stop anxiously worrying about the future, you need to build your exposure to gold – I don’t care how you do it, but here are the reasons why you must.
We are quickly approaching a time of “hyperinflation”. This is where the rate at which money is printed is happening so fast that the economy and the public slow to appreciate the speed at which purchasing power is evaporating.
But considering the world’s inventory of cash has just increased by a multiple of at least 2, and the global GDP – which represents the total value of all goods produced, among other things, is going to go down at least 10% in the current quarter, you just can’t argue with the fact that the dilutive effect of doubling the money supply is going to devalue the currency.
But most of that central bank-fabricated cash is being siphoned off into the private accounts of the global banking elite, like Jamie Dimon, Lloyd Blankfein, and that ilk. Not overtly – but in very sneaky fashion – through fees and bonuses and various other methods bankers specialize in to justify their overpriced existence.
So it is not having the expected inflationary effect, because those numbers and all the zeros are not being brought to bear on the supply of goods and services. Instead, they are being offloaded, and guess what those largest offshore capital pools are buying?
That’s right. Gold.
I dare you to go to your local gold bullion dealer and ask to buy $100,000 worth of gold bars.
Two things will happen: either a) you will be told they are sold out, or b) they will sell you some, but at a huge markup to the quoted spot price.
In fact, the markup will be several percentage points higher than the quoted spot gold price on markets.
And if you offered to sell him $100,000 worth of gold, the dealer would tell you that he can only buy it at a discount to the quoted spot price.
But if you held out long enough, he too, would be willing to pay a premium to the spot price of gold for your gold, and in fact, you would leave with more than the $100,000 you thought your gold was worth.
That’s because the dealer knows something that the U.S. government doesn’t want you to know; namely, that the purchasing power of the US dollar is going down, and the purest way to see that happening before it shows up as price inflation in stores, is in the value of gold.
When the spot price quoted by the exchanges (who don’t have any gold) fail to reflect what people are willing to pay for it, you have a situation where the price of gold fails to reflect the value of gold. And that is what is happening right now.
Which is also what makes gold the best investment in the world right now.
The problem is getting it.
It takes a tremendous leap of faith, and great deal of confidence, to walk into a bullion dealer and pay 3 -5 % above the quoted market price for any given quantity of gold. (Assuming you can get any)
I have one client in my Financial Communications division left. They are a gold mining company called Galane Gold Ltd. (CVE:GG) (OTCMKTS:GGGOF) (FRA:25G) (Full Disclosure: They have paid a fee of $50,000 to my company to build an investor awareness campaign. I also have 1 million options of the company at $0.10 per share.)
Galane Gold produces gold at two mines: One is in Botswana, and the other is in South Africa. They produced 33,000 ounces of gold last year at all in costs of around $1,000 per ounce. This year, the Galaxy mine in South Africa is shut down due to COVID-19, and the main producer in Botswana is running at 50% capacity, meaning that production will be lower in 2020, but the companies production will be sold at higher prices than in 2019 (assuming the price of gold persists above $1,700).
Here is what I told the Chairman of Galane Gold, Ravi Sood:
I told Ravi that henceforth, I would like to receive our fee in gold. Not cash. Gold.
That’s how convinced I am that gold is going to go higher, and that the purchasing power of cash is going to go lower. I am transforming my fee structure from USD to gold. And also, I will offer a discount if the client agrees!
It doesn’t get any more sincere than that!
Galane Gold is one of the only small profitable, producing, publicly traded gold company’s in the world.
In this interview, Mr Sood analyzes the macro environment of gold and why the future outlook for the precious metal commodity is bright.
There are a variety of catalysts effecting the gold price at present times such as Coronavirus and interest rate cuts but the chairman says the bottom line driver of gold price is always going to be the ongoing sovereign debt crisis. As of March 31, 2020, the US national debt reached $23.31 trillion which is more than the country’s nominal GDP.
In the last few months, the gold producer has seen a categorical shift seeing an explosion of inbounds of people chasing the company for access to off takes of gold.
Watch the entire interview to learn how central banks have kept the gold price low, why the gold price is poised to explode higher and how Galane Gold is taking full advantage of the change in tides.
Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.
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