The Gold Bust

Is the gold rush over? Are we entering a gold bust?

Trump has caused a huge market rally in stocks. Yet, so many people, including myself, invested in precious metals, particularly gold. Entire IRAs have been transferred into gold. What are people supposed to do when their entire retirement account is in gold and Trump is rallying the market. He's meeting with business leaders and wants to make America great again.

For gold investors this can be a bitter sweet pill to swallow, especially if they will retire in the next 10 years.  Donald Trump has been known to escape bankruptcy by restructuring debt, what if he is able to restructure the $20 Trillion dollar U.S. debt? If there is a dollar rally, gold will get weaker. The short-term outlook isn't too bright. Five years ago, during the Obama administration, gold seemed a sure thing. Today, not so much. Even during the last 5 years of the Obama administration gold dropped $300 per ounce.

Also, Sovereign Man has just released information that demand for physical gold is currently collapsing.

I serve on the Board of Directors of a large Singapore-based company that’s in the gold and silver business. And, last night during our quarterly conference call, the management team gave me a lot of intriguing information. Sales of physical gold and silver are collapsing across the entire industry. At the US Mint, for example, sales of US Eagle gold coins fell by 67% between February 2016 versus February 2017. And sales of US Eagle silver coins are down 75% over the same period. The World Gold Council’s data also shows a substantial decline in physical precious metal demand in 2016, particularly with bars, coins, and jewelry.

There is now a huge amount of unspoken buyer's remorse for people who placed large amounts of their retirement in gold, which they now must hope they can redeem for a decent amount of cash. Moreover, gold brokers will take a cut of the gold they sell, which will knock down what they bring home. That's assuming people will be able to sell it during a market crash. One of the main reasons I didn't place all my chips into gold is because I can't eat it. It made much more sense to me to have assets, real goods, than to have precious metals.

However, I am concerned that this sit and wait for the "crash" method will not work out for anyone. Moreover, most stocks rose in the past 8 years. Major stocks were mainly up during Obama. When Obama was elected in 2008, Google stock was $131 per share. If someone would have placed $100,000 of their retirement into Google at that time, it would have given them 763 shares. Guess how much those shares are worth today? Those 763 shares would be worth $640,150 today. So, in less than 10 years, your investment would have returned 5 times your original investment or 500%. Gold over the same time period only returned 50%. If you think this is just a Google phenomenom, it isn't. The same is true of a lot of American companies, Amazon, Apple, Facebook and Tesla have also doubled a few times. I'm convinced that if someone would have invested their entire retirement into major American companies 8 years ago, they would be a millionaire by now.

So, heck yeah a lot of us precious metal investors are really upset right now when gold and silver hasn't moved, lost value, and/or hasn't been able to help us retire at all. Okay, enough of my rant. There is actually a way to salvage your precious metal investment that is legit. This is for you, only if you want to stop listening to the "buy gold, store it at home, wait until the market crashes, then sell it to eat when no one is buying after a market crash" people. If this is something you understand,  you can begin to recover your retirement and begin to get astronomical returns on your investments. Click here to find out how you can begin to get huge returns on your investments in the next few years.

 

P.S. I'm not saying sell your gold. Keep your gold, but don't put your entire retirement into gold. Some of the people pushing gold are running a bigger scam than the Federal Reserve, and that is saying a lot. So, be careful and do your reseach. Try to salvage as much as you can from your gold investment.

P.P.S. Moreover the dollar wasn't dropping because it was unstable, it was dropping because people believed it was unstable. All fiat currencies stand on its general acceptance by the population. It isn't the value the dollar has that makes it valuable, it is the belief people hold of the value of the dollar that makes it valuable. Gold buyers were effectively dumping dollars and lowering demand for U.S. currency, which was one of the reasons dollar value dipped. So when gold bugs were saying, "the dollar is collapsing, buy gold", they were basically ensuring the very thing they predicted would happen by lowering demand for dollars. This was a run on the dollar. It spread worldwide, because what foreign power would want to hold dollars that the citizens of the U.S. didn't even want to own.

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Alison the Writer
Alison is an avid book reader and great writer for CA. Her favorite thing to do is watch Youtube videos and spend time with her family.