by Chris Powell, Gold Seek:
A friend from the U.S. heartland writes:
“Over the decades we gold bugs have seen numerous rumors of gold price surges, crashes, and coming disasters of one sort or another come and go without materializing. So naturally I am skeptical of the latest one making the rounds about prices gravitating to China from London and New York.
“Nevertheless, I am hopeful that the monetary metals will finally get their due and their true prices set. I wonder what your sense is.
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“Will we look back on July 2026 and remember that this was the month when the monetary metals reflected the true value of our currencies? It would seem fitting on our semiquincentennial.”
Your secretary/treasurer is hopeful as well, for these reasons, among others:
— The shift of gold and the gold trade from West to East seems undeniable.
— The steady acquisition of gold by central banks in recent years seems undeniable as well.
— Gold seems to be the only practical international alternative to the dollar — seems to be the once and future world reserve currency.
— The U.S. national debt is out of control and politics will never let it be controlled.
— U.S. foreign policy has antagonized so much of the world in recent years that many countries have stopped cooperating with the longstanding gold price suppression policy supporting the dollar.
Of course asking your secretary/treasurer about the prospects for the monetary metals is a bit like asking the barber if you need a haircut. But even as we’re often annoyed and feeling thwarted by daily events, we should remember that when GATA got into this crazy sector 27 years ago the gold price was less than $300 and silver was under $5. What is that — gains of 1,300%, an average of 48% per year?
Yes, to calculate real gains you have to deduct the real inflation rate from that 48%, so maybe the average real annual gain for the monetary metals in all this time is “only” 30%.
The average annual rate of return for the stock market is said to be 10% and the average rate of return for Warren Buffett’s Berkshire Hathaway is said to be 20%. If Buffett is a genius, what does all this make investors in the monetary metals?
Maybe some discouragement of monetary metals investors is a matter of their seeking leverage by investing in mining company shares in preference to the metals themselves. This is logical but markets are not necessarily logical, especially not highly manipulated markets.
It seems that mining company shares have increased in value in the last 27 years by about 300% while the general stock index, the S&P500, is up about 950%. But then some people don’t realize that mining is a terribly difficult business on top of being the most capital-intensive and most regulated business. Spectacular gains are possible but ordinary gains are often hard enough to achieve.
Resentful as GATA is about the corruption and cowardice of mainstream financial news organizations — their refusal to report honestly about the gold and currency markets, and their suppressing information about government interventions against gold — most governments and central banks know the score by now, especially those that are members of the International Monetary Fund and Bank for International Settlements. Those agencies are where currency market rigging — call it “management” if you want — is conducted, and major governments and central banks now seem to be anticipating fundamental change.
GATA can be credited for alerting some of them to what has been going on.
