Investors need to understand that we're in a prolonged "risk on" climate, likely to persist through year-end. Governments worldwide, burdened by insurmountable debts, are opting for the easy route: continual money creation to mask problems and keep the system limping along.
This strategy serves the central banks — the true global powers — by facilitating wealth transfer from the lower and middle classes to the ultra-rich. The wealthy benefit from propped-up bond markets and soaring stocks, while the average person bears the cost through escalating inflation.
It's crucial to recognize that the stock market has decoupled from the real economy. Unlike before, when falling stocks signaled economic downturns, we now see markets hitting new highs while the economy crumbles. This disconnect stems from the market's dependence on central bank liquidity injections rather than economic fundamentals.
Long-term, this situation is unsustainable. Exponential debt growth will eventually go vertical, with vast sums needed just to service existing debt. We're already seeing this, with the Fed creating a trillion dollars every 100 days. Unless they rein it in - which they won't and can't without triggering an unprecedented collapse - we're heading towards hyperinflation. We're already in an inflationary depression that will evolve into a hyperinflationary one. When this occurs, paper assets will become worthless — a convenient way to solve the debt crisis by rendering money valueless.
The elite are aware of this inevitability; it's part of their plan. Hence, the World Economic Forum's notorious slogan: "You will own nothing and be happy."
For investors, the only way to preserve wealth when the system implodes - either through deflation if monetary taps are shut off or via hyperinformation - will be through tangible assets or items with intrinsic value: collectibles, land, gold, silver, and commodities.
Currency, debt instruments, and non-hard assets will become worthless. Laws have been altered to favor top-tier banks in liquidations, leaving other creditors out in the cold. This is part of The Great Taking, a component of The Great Reset aiming to establish a global neo-feudal system.
As hyperinflation approaches, gold and silver will skyrocket, likely becoming the most coveted assets. Cryptocurrencies might also perform well. Until then, it's still acceptable to play the stock market, though a correction may be due after recent gains. While gold and silver might lag behind popular AI or tech stocks for now, they're unlikely to perform poorly due to built-in inflation and their tendency to anticipate future developments.
A long-term gold chart reveals a giant Cup and Handle consolidation pattern forming since 2011, following the 2000s bull market. This spring saw a significant breakout, indicated by increased volume. We can expect the sector to not only advance but accelerate upwards, aligning with the trajectory towards hyperinflation. Investors in this sector can remain confident, viewing minor fluctuations as opportunities to build their positions.
For a while now, the greenback has been playing the role of "the best of a bad bunch" in the global currency arena. As a result, the yellow metal has actually shown more impressive gains when measured against other currencies. Take a gander at how gold has performed versus the Japanese Yen, for instance. If we look at the same timeframe as the dollar-denominated gold chart we just examined, a different picture emerges.
What we observe is that the precious metal has been on a steady upward march against the Yen for quite some time.
So, I say stay long and look at any corrections (most likely minor) as opportunities to buy or change positions.
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Clivemaund.com Disclosures
The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks cannot be construed as a recommendation or solicitation to buy and sell securities.
