Gold - A Simple Insurance Policy

Gold is on the precipice of a period of Powerful Outperformance.

Remember, GOLD is insurance.

Here are 5 reasons why forward-thinking Investors should consider GOLD.

Right now, the US economy is growing faster than expected.

Despite pessimism, retail sales accelerated.  ISM production index continues to grow.  New orders are a leading indicator for production, and rising new orders suggest production index should continue its growth for some time.   Unemployment claims are under 200k, a historic low level. 

The US GPD is growing at 5%.  However, better growth is also pushing yields higher.

Inflation Expectations Are Rising

Inflation usually follows growth.  After falling for over a year, the 5-year breakeven inflation (a long-term inflation gauge) is rising again.

Gold is a store of value.  Gold outperforms in inflationary periods.

Geopolitical risks are rising.

The U.S. is now supporting two wars on foreign soil.  Oil-producing countries are on the other side.  China is also on the wrong end.

Are peace times coming to an end?

Gold is the only proven INSURANCE against rising geopolitical risk.

Is The US losing control of its finances?

The current 6% deficit is the highest in a non-recessionary period.  It is highly likely that deficit spending will only increase in an election year. As a result, the Treasury will sell more bonds at high rates to support deficit spending.  A rising deficit will ultimately lead to Dollar weakness.  While Dollar weakness may not be imminent, it is inevitable.

Gold is the only proven instrument to protect the spending power of citizens.

Banks are under increasing duress.

Consumers are moving their savings out of the banking system into higher-yielding alternatives.  Higher rates are reducing loan demand.  Long-duration investments on bank balance sheets are underwater.   The eventual economic slowdown will pressure Office and commercial real estate investments even more. Banks are weak. Is another SV Bank around the corner?

Gold is the only Asset with no counterparty liability! 

Strong US growth will not last forever.

Eventually, the current low-cost debt will have to be refinanced at higher rates. This will raise the cost of capital and cause a slowdown. Forward-looking investors buy uncorrelated assets in anticipation of tough times.

Gold outperforms most asset classes in a recession. 

Gold is INSURANCE.