Gold, Silver and Freedom – The Greatest Theft Never Known

April 23, 2024

Gold in the 1970s: A Decade of Unprecedented Performance

The 1970s marked a pivotal decade for gold, characterized by extreme volatility and exceptional gains. This period was defined by a series of economic events that dramatically influenced the global financial landscape. Here, we explore how gold performed during the 1970s and the official explanations for its behavior.

The End of the Bretton Woods System

The decade began with a critical shift in the global financial system: the end of the Bretton Woods Agreement in 1971. Established post-World War II, the Bretton Woods system had fixed exchange rates with the US dollar pegged to gold at $35 per ounce. However, due to mounting inflationary pressures and excessive US dollar printing to fund government spending (notably the Vietnam War), President Richard Nixon announced the suspension of the dollar’s convertibility into gold. This decision effectively ended the Bretton Woods system and led to the free-floating of currency exchange rates. The uncertainty and resultant instability in the forex markets drove investors towards gold as a safe haven asset.

Inflation and Economic Uncertainty

The 1970s were marked by high inflation, triggered by several factors including the oil crises of 1973 and 1979. The OPEC oil embargo led to skyrocketing oil prices and severe inflation across economies, severely eroding the purchasing power of fiat currencies. Gold, traditionally viewed as a hedge against inflation, saw increased demand. As consumer prices rose, so did the allure of gold as a store of value.

Investment Demand

With the collapse of the fixed currency exchange system and rising inflation, investors increasingly turned to gold. The decade also saw the legalization of gold ownership for US citizens in 1974, further boosting demand. Prior to this, gold ownership had been restricted to certificates and limited forms of bullion. The legislative change allowed private ownership of gold bars and coins, increasing the accessibility of gold to the general public and sparking a surge in investment demand.

Global Political Instability

The 1970s were rife with geopolitical tensions and conflicts, including the continuation of the Cold War, the Vietnam War, and various Middle Eastern conflicts following the oil crisis. Such events added to the economic uncertainty and boosted gold’s role as a crisis commodity.

Performance Recap

The cumulative effect of these factors was profound. Gold prices skyrocketed from $35 per ounce at the beginning of the decade to approximately $850 per ounce by January 1980. This represented an extraordinary gain, reflecting gold’s status as a safe haven during times of economic turmoil.

Conclusion

The 1970s established gold as a powerhouse investment, influenced by a complex interplay of economic policies, market dynamics, and geopolitical tensions. The decade not only underscored gold’s crucial role in the financial system as a hedge against inflation and currency devaluation but also marked its resurgence as a key asset in investment portfolios worldwide.

This summary provides a concise overview of the major drivers behind gold’s performance in the 1970s, illustrating how it became a cornerstone asset for investors seeking stability in turbulent times.

December 20, 2023December 28, 2023

Assessing Gold Performance in the December-January Period

Introduction:

Gold has long been considered a safe-haven asset, and its investment performance is closely scrutinized, especially during volatile periods. The months of December and January often bring about a unique set of circumstances that can impact the precious metal’s value. In this article, we will explore the historical performance of gold investments during the typical December-January period and analyze the factors that contribute to its fluctuations.

Historical Trends:

Year-End Demand: Historically, the demand for gold tends to rise towards the end of the year. Investors often seek to diversify their portfolios and hedge against economic uncertainties, making gold an attractive option. This increased demand can contribute to upward pressure on prices.
Festive Season and Jewelry Demand: The holiday season, particularly in December, sees a surge in consumer spending and, consequently, an uptick in the demand for gold jewelry. This spike in demand can influence the overall performance of gold during this period.
Market Volatility: The transition from one calendar year to the next often brings about increased market volatility. Uncertainties related to economic data, geopolitical events, and global tensions can drive investors towards safe-haven assets like gold.
Dollar Performance: The performance of the U.S. dollar can have a significant impact on gold prices. When the dollar weakens, gold becomes more attractive to investors as it is priced in dollars. Conversely, a stronger dollar may put downward pressure on gold prices.
Interest Rates: Central bank policies and interest rate decisions also play a crucial role in determining gold prices. Generally, lower interest rates make non-interest-bearing assets like gold more appealing, while higher rates may have the opposite effect.

Case Studies:

Let’s delve into a few notable instances to highlight gold’s performance during December and January in recent years.

2019-2020: The end of 2019 and the beginning of 2020 saw heightened global uncertainties, including trade tensions and geopolitical issues. During this period, gold prices experienced a significant rally as investors sought safety amid market turbulence.
2020-2021: The COVID-19 pandemic heavily influenced financial markets in 2020. Gold, acting as a safe-haven asset, witnessed robust demand during the peak of the crisis. As economies started recovering in 2021, gold prices faced some downward pressure.
2021-2022: The transition from 2021 to 2022 was marked by concerns about inflation, central bank policies, and ongoing pandemic-related challenges. Gold prices exhibited volatility, responding to changing economic conditions and global uncertainties.

Conclusion:

While historical trends suggest that gold tends to perform well during the December-January period, it’s essential for investors to consider a broader set of factors that can influence its value. Economic indicators, geopolitical events, and changes in market sentiment all contribute to the intricate dance of gold prices.

As with any investment, thorough research and a clear understanding of the global economic landscape are crucial. While gold may offer stability during times of uncertainty, prudent investors should diversify their portfolios and stay informed about the dynamic factors affecting the precious metal’s performance.

December 13, 2023December 13, 2023

Platinum, the Jim Rogers View

Investing in platinum and palladium, according to Jim Rogers, is akin to uncovering hidden treasures in the commodities market—both metals bear unique characteristics and play pivotal roles in industrial applications, presenting intriguing investment opportunities for the astute investor.

Platinum: The Precious Metal with Industrial Might

“Platinum wears the dual crown of luxury and utility,” Rogers might opine. He recognizes platinum’s status as a prestigious precious metal, often associated with high-end jewelry and automotive catalysts. However, he would highlight its critical role in industries like automobile manufacturing, emphasizing its scarcity and indispensability in catalytic converters for cleaner emissions.

Palladium: The Unsung Hero of Industrial Demand

Rogers might describe palladium as the silent workhorse of the metals market. He’d underscore its dominance in the automotive sector, particularly in gasoline-powered vehicle catalysts. “Palladium quietly powers the wheels of the automotive world,” he’d suggest, acknowledging its essential role in reducing harmful emissions.

Supply-Demand Dynamics

Supply-demand fundamentals are crucial to Rogers’ perspective on platinum and palladium. He might delve into the challenges of their production, highlighting the concentration of mining in specific geographic regions like South Africa and Russia. He’d likely emphasize that supply disruptions or geopolitical tensions in these regions can significantly impact prices due to limited global production.

Macro Trends and Price Volatility

Similar to his outlook on other commodities, Rogers might relate platinum and palladium’s price movements to broader economic trends. He’d emphasize their sensitivity to global economic conditions, industrial demand, and geopolitical factors. “Platinum and palladium ride the waves of economic cycles,” he’d note, acknowledging their susceptibility to market volatility.

Physical Metals vs. Mining Equities

Rogers might express a preference for physical ownership of platinum and palladium over investing in mining companies. He’d likely highlight the risks associated with mining stocks, including operational challenges, geopolitical uncertainties, and management decisions. “In these metals, owning the physical assets is akin to holding the crown jewels,” he’d suggest, emphasizing the tangible value of owning the metals themselves.

Long-Term Potential

Jim Rogers’ investment philosophy involves seeking long-term value, and he might view platinum and palladium through a similar lens. He’d likely advocate for these metals as potential hedges against inflation and a part of a diversified investment portfolio, emphasizing their enduring industrial significance and scarcity.

In essence, Jim Rogers’ perspective on platinum and palladium investing underscores their dual nature as precious metals with industrial importance. He sees them as integral components of the commodities market, presenting opportunities for investors who understand their unique dynamics and their roles in both luxury and industrial sectors.

Jim is most reknowned for his 1970s Quantum fund management with George Soros and more lately, his move to Singapore. He seems to have a knack for knowing when to buy low and sell high and freely shares his insights via interviews and Books.

December 13, 2023December 13, 2023

Jim Rogers Talks about Silver

After so much success with his gold views, I asked ChatGPT what Jim’s views on silver are and am very grateful to their information for us average investors…

Investing in silver, through the lens of an astute investor like Jim Rogers, is akin to navigating the uncharted waters of an economic adventure—fraught with volatility yet laden with opportunities for the discerning investor.

Silver as an Industrial and Precious Metal

“Silver is a hybrid, straddling the worlds of industry and investment,” Rogers might muse. He acknowledges silver’s dual role as both a precious metal and an industrial commodity, recognizing its diverse applications across various sectors, from electronics to solar panels. This industrial demand often shapes his views on its long-term value.

Supply and Demand Dynamics

Rogers keenly observes the supply-demand dynamics in the silver market. He might emphasize the growing demand for silver in emerging technologies, juxtaposed with the challenges in its production and supply. “Silver is a metal in the shadows of its golden sibling, yet indispensable in the modern world,” he’d likely comment, highlighting the potential scarcity in the face of rising demand.

Silver vs. Gold: A Comparative Perspective

Drawing parallels between silver and gold, Rogers might emphasize the volatility and potential upside of silver compared to its more illustrious counterpart. He acknowledges that silver tends to amplify the moves of gold, often outperforming it in bull markets but also bearing the brunt of downturns. “Silver is the wild cousin of gold,” he’d quip, alluding to its penchant for higher volatility.

The Role of Macro Trends

Rogers’ investment philosophy revolves around macroeconomic trends, and silver fits into this narrative. He might delve into the correlation between silver and broader economic trends, pointing out its sensitivity to inflation, currency devaluation, and geopolitical tensions. “Silver dances to the beat of macro rhythms,” he’d likely comment, underlining its responsiveness to global economic shifts.

Physical Silver vs. Silver Equities

Similar to his views on gold, Rogers might lean toward physical silver over investing in silver mining companies. He might express concerns about the operational risks, management decisions, and geopolitical uncertainties that mining companies face. “In silver, owning the metal is holding the ace,” he’d opine, emphasizing the tangible value of physical ownership.

A Long-Term Perspective

Jim Rogers’ investment horizon spans generations, and his views on silver echo this patience. He might advocate for holding silver as a long-term hedge against currency debasement and inflation, reiterating its role as a store of value through tumultuous economic cycles.

In essence, Jim Rogers’ take on silver investing reflects a nuanced understanding of its industrial significance, market volatility, and its potential as a hedge in a diversified investment portfolio. To him, silver isn’t just a metal; it’s a multifaceted asset poised to shine amid the complexities of global markets.

December 12, 2023December 13, 2023

Jim Rogers, Investing Master on Gold

I asked recently what Jim Rogers, the author of such classics as The Investment Biker and Hot Commodities, had to say about Gold. And here it is.

Investing in gold, according to the legendary investor Jim Rogers, isn’t merely a financial move—it’s a testament to understanding the pulse of the global economy and the cyclical nature of markets.

“Gold isn’t just a shiny metal; it’s a beacon of economic insight,” Rogers might emphasize. His approach to gold investing is deeply rooted in history and a profound understanding of market dynamics.

Gold as a Store of Value

Rogers often views gold as a historical store of value, dating back centuries. “Gold has weathered the storms of civilizations,” he’d assert, pointing to its enduring status as a haven asset during times of geopolitical turmoil or economic uncertainty. In his eyes, owning gold isn’t just about profit; it’s a means of preserving wealth across generations.

The Dollar and Gold Relationship

One of Rogers’ fundamental tenets is the inverse relationship between the US dollar and gold. He acknowledges that when the dollar weakens, gold tends to strengthen. “The dollar and gold dance an intricate tango,” he’d remark. For him, this correlation underscores the importance of gold as a hedge against currency devaluation.

The Role of Central Banks

Central banks’ actions significantly influence Rogers’ perspective on gold. He’s been vocal about their impact on the metal’s price through buying and selling, recognizing their position as major players in the gold market. “When central banks sneeze, gold catches a cold,” he might quip, underscoring how their policies can sway gold’s trajectory.

Mining Companies vs. Physical Gold

Rogers might advocate for holding physical gold over investing in gold mining companies. While acknowledging the potential profits in mining stocks during bullish cycles, he often highlights the risks associated with management decisions, operational challenges, and geopolitical uncertainties that impact mining companies. “When investing in miners, you’re not just betting on gold, you’re betting on management,” he’d caution.

A Contrarian View

Rogers’ contrarian nature might also surface in his views on gold. He might advocate for buying gold when sentiment is low and selling when exuberance prevails. “The time to buy is when there’s blood in the streets,” he might quip, emphasizing the importance of taking positions when others are fearful.

Long-Term Perspective

Jim Rogers is known for his long-term investment horizon, and his views on gold align with this philosophy. He might emphasize that gold isn’t a get-rich-quick scheme; rather, it’s a hedge against uncertainty over extended periods. “Think in decades, not days,” he’d advise, highlighting the importance of patience and resilience in gold investing.

Diversification and Gold

For Rogers, gold is a vital component of a diversified portfolio. He wouldn’t advocate going all-in on gold but rather incorporating it as part of a balanced investment strategy. “Diversification is essential in the investment jungle,” he’d opine, advocating for a mix of assets to mitigate risks.

Final Thoughts

In the world of investing, Jim Rogers’ approach to gold is a mosaic of historical perspective, macroeconomic understanding, and a contrarian’s eye for opportunity. To him, gold isn’t just a metal; it’s a reflection of human history, economic cycles, and a prudent safeguard against the unpredictability of financial markets. His words echo a timeless sentiment: “When in doubt, bet on gold.”

December 12, 2023

The Glittering Prospects of Investing in Gold and Silver Mining ETFs

In a world where financial markets sway like a pendulum, investors perennially seek sturdy and reliable assets to safeguard their wealth. Among the constellation of investment options, gold and silver have stood the test of time, revered for their intrinsic value and as a hedge against market volatility. While purchasing physical bullion has been a traditional avenue, an increasingly popular and diversified approach is investing in Gold and Silver Mining Exchange-Traded Funds (ETFs).

Understanding Gold and Silver Mining ETFs

Gold and Silver Mining ETFs encapsulate a basket of companies involved in the exploration, extraction, and production of these precious metals. Investors gain exposure to multiple mining companies through a single investment vehicle, benefiting from the collective performance of the underlying companies within the ETF.

Advantages of Investing in Gold and Silver Mining ETFs

1. Diversification: These ETFs offer exposure to a diversified portfolio of mining companies, mitigating individual company risk. Fluctuations in any one company’s performance have a diluted impact on the overall investment.

2. Liquidity and Accessibility: Buying and selling ETF shares is relatively easy, offering liquidity compared to investing directly in individual mining companies. Investors can trade ETF shares on major exchanges during market hours.

3. Cost-Efficiency: Gold and Silver Mining ETFs generally have lower expenses compared to actively managed funds. They offer a cost-effective way to gain exposure to the precious metals sector.

4. Risk Mitigation: While individual mining companies can face operational, geopolitical, or financial risks, a diversified ETF spreads risk across multiple companies, potentially reducing the impact of adverse events on the investment.

Disadvantages to Consider

1. Volatility: Precious metal prices, and consequently mining ETFs, can be highly volatile. Fluctuations in commodity prices, global economic conditions, and currency movements can impact the fund’s performance.

2. Company-Specific Risks: Despite diversification, if a significant holding within the ETF faces operational issues or regulatory hurdles, it can affect the overall fund performance.

3. Tracking Error: Some ETFs might not perfectly track the performance of the underlying assets due to factors like fees, expenses, and the fund’s methodology.

Safety Aspects of Holding Shares in an ETF

The safety of holding shares in a Gold and Silver Mining ETF is contingent on various factors:

1. Regulatory Oversight: ETFs are regulated investment products, subject to oversight by financial authorities, ensuring a level of investor protection.

2. Asset Custody: ETFs typically employ reputable custodians to safeguard the underlying assets, reducing the risk of mismanagement or fraud.

3. Transparency: Most ETFs regularly disclose their holdings, allowing investors to monitor the composition of the fund and the performance of underlying assets.

4. Market Liquidity: The ability to easily buy and sell ETF shares on the open market provides a level of liquidity, allowing investors to exit positions without significant price impact.

In Conclusion

Investing in Gold and Silver Mining ETFs can offer an avenue for exposure to precious metals without the complexities of owning physical bullion or individual mining stocks. However, like any investment, it’s essential to weigh the advantages against the potential risks and consider personal investment goals and risk tolerance before diving in. While these ETFs can provide diversification and potential for returns, investors should conduct thorough research and consider consulting a financial advisor to make informed investment decisions in line with their financial objectives.

Remember, the glitter of gold and silver in the investment world often comes with its share of fluctuations, and a balanced, well-researched approach can help navigate the highs and lows of this intriguing market.

December 12, 2023

Investing in Cryptocurrencies

Investing in cryptocurrencies through platforms like Binance has emerged as a contemporary alternative to traditional investments like gold. The allure of crypto lies in its decentralized nature, potential for rapid growth, and its position at the forefront of technological innovation.

Binance, one of the leading cryptocurrency exchanges globally, offers a user-friendly interface and a diverse range of cryptocurrencies for investment. Unlike gold, which has historically been a store of value, cryptocurrencies such as Bitcoin and Ethereum operate on blockchain technology, providing transparency, security, and potential for significant returns on investment.

One of the key aspects of investing in crypto via Binance is the accessibility it offers. Investors can start with small amounts, enabling broader participation regardless of financial standing. Moreover, the 24/7 market availability allows for flexibility in trading, unlike the limited trading hours of traditional markets.

While gold has been a long-standing hedge against inflation and economic uncertainty, cryptocurrencies are increasingly being seen as a hedge against traditional market fluctuations. Some investors view crypto as a means to diversify their portfolios beyond traditional assets like gold, aiming to capture potential high-growth opportunities in a rapidly evolving digital landscape.

However, it’s essential to note that investing in cryptocurrencies comes with its own set of risks. The market’s volatility can lead to substantial price fluctuations within short periods, making it a high-risk, high-reward investment. Regulatory changes, security concerns, and market sentiment can also significantly impact crypto prices.

Ultimately, the decision to invest in cryptocurrencies via Binance as an alternative to gold depends on an individual’s risk tolerance, investment goals, and understanding of the market. It’s crucial to conduct thorough research, understand the technology behind cryptocurrencies, and consider seeking advice from financial experts before diving into this dynamic and evolving investment space.

December 10, 2023December 12, 2023

Precious Metals Surge: Unveiling the Dynamics Behind Silver and Gold Rally, and the Impending Rise of Platinum

Introduction:

In recent times, the world has witnessed a remarkable surge in the prices of precious metals, particularly silver and gold. Investors and enthusiasts alike have been closely monitoring the factors contributing to this rally. As we explore the reasons behind the ascent of silver and gold, we will also delve into the potential for platinum to follow suit, given the unique dynamics surrounding its production.

The Silver Lining:

Silver, often referred to as “the poor man’s gold,” has experienced a surge in demand for several reasons. One primary factor is its dual role as both a precious metal and an industrial commodity. The increasing demand for silver in the electronics and solar industries has created a substantial market for this versatile metal. Additionally, the low interest rate environment and inflation concerns have propelled investors to seek refuge in tangible assets like silver.

Gold Glitters Amidst Economic Uncertainty:

Similarly, gold has maintained its status as a safe-haven asset, drawing investors seeking stability during times of economic uncertainty. The ongoing global challenges, including the COVID-19 pandemic and geopolitical tensions, have fueled the demand for gold as a store of value. Central banks’ continued monetary stimulus measures and the fear of inflation have further intensified gold’s appeal, driving its price to new heights.

Platinum’s Turn in the Spotlight:

Now, attention is shifting towards platinum as a potential beneficiary of the current market dynamics. Platinum is a crucial metal, widely used in the automotive industry, particularly in catalytic converters. The majority of the world’s platinum supply (over 70%) comes from South Africa and Russia. However, recent developments in South Africa, a major platinum producer, raise concerns about the metal’s future availability.

Power Struggles in South Africa:

South Africa, a key player in the global platinum market, faces challenges in its power supply infrastructure. The country’s electricity grid has been plagued by issues such as load shedding and an aging power infrastructure. Unreliable power supply not only disrupts mining operations but also affects the overall economic activity, potentially impacting platinum production.

Russia’s Role in Platinum Supply:

On the other hand, Russia, another significant contributor to the global platinum supply (around 10%), has maintained a relatively stable production environment. However, geopolitical uncertainties and international relations may impact future supplies. Investors are closely monitoring these geopolitical factors as they consider the potential impact on platinum prices.

Investor Outlook and Conclusion:

As silver and gold continue to shine amid economic uncertainties, platinum emerges as a compelling investment opportunity. The metal’s unique industrial applications, coupled with concerns over the reliability of power supply in South Africa, suggest a potential uptrend in platinum prices.

Investors are advised to stay vigilant and consider diversifying their portfolios to include precious metals like platinum. The evolving dynamics in South Africa and Russia, combined with the global economic landscape, could position platinum as the next metal to garner significant attention in the ever-changing world of commodities.

Handily enough, Bullionvault* also allows investment in Platinum. As does Revolut*.

Both businesses will remit a small portion of their fees to us, but this doesn’t affect the price for you and we do genuinely recommend them for good service and access to corners of the market often off-limits to smaller investors like us.

March 21, 2023March 21, 2023

Gold, What is it Good for?

After a year of silence on here (14 months, actually..), let’s get with the times and let chatai have a go at explaining why you should invest in gold :-

“

Gold has several properties that make it useful for a variety of purposes:

Jewelry: Gold is a popular choice for jewelry because it is malleable and ductile, meaning it can be easily shaped and formed into intricate designs.
Investment: Gold has historically been used as a store of value and a hedge against inflation, making it a popular investment option.
Electronics: Gold is an excellent conductor of electricity, making it a valuable component in electronic devices such as computers, cell phones, and televisions.
Dentistry: Gold is also used in dentistry for its non-reactive nature and durability, making it a popular choice for fillings, crowns, and other dental work.
Industrial Applications: Gold is also used in a variety of industrial applications, such as in the production of glass, electronics, and aerospace equipment.

Overall, gold is a versatile and valuable metal with a wide range of applications.”

Now, go and ask OpenAI the same question regarding paper money.