Psychology observes that most people easily grow accustomed to their surroundings – even if those surroundings are unpleasant. It’s called normalcy bias, and it impacts how people feel about everything in their daily lives.
Think about every bad relationship or job you’ve had. You probably stuck around for way longer than you should have, and in retrospect, it’s hard to believe what you put up with.
Right now, people have become accustomed to $4,000/oz gold. It’s a gold price practically unthinkable as recently as 3 months ago.
But it’s not just a price – as with all prices, it’s a signal of something much deeper. In markets, prices are more than a tag with a number on it… they’re information about supply, demand, future expectations, rational guesses and deeply held fears from millions of participants.
$4,000 gold is not normal. It’s a 5 alarm fire. It signifies a massive failure of global fiat currency systems. People who are now nestling into the normalcy bias of $4,000 gold are like people in wildfire country ignoring the sirens and evacuation orders until their curtains are on fire.
We got here through what I believe is one of the greatest cons affecting the most people in world history: the idea that paper printed by governments or digital currencies managed by governments are a fine alternative to physical precious metals.
It’s a colossal mistake that’s just beginning to unwind. $4,000 gold is the alarm telling you just so.
It might feel like gold is weakening over the past few weeks. That feeling is normalcy bias creeping in. In this case, we got accustomed to gold jumping 5% a week for months on end. Now, anything less than a continuation of that monster rally feels weak.
But I want you to keep in mind what $4,000 gold means. I want you to remember where gold was when the US debt or even M2 money supply was under $10 trillion back between 2008-2012.
Gold was well under $2,000/oz.
And I also want you to keep in mind what every major politician on both sides of the aisle, the COB, the Fed, the Treasury – what everyone who has any influence on monetary/fiscal policy is saying right now.
Are they saying we should make big cuts? Are they saying we should slow spending, strengthen the dollar and get serious about fighting inflation?
No.
Outside of some lip service from the GOP, no one is serious about any of the steps necessary to slow the devaluation of the dollar. Many of the most influential people are dead set and clear on devaluation as a policy choice – to make our exports cheaper, inflate away debts, etc.
We’re in the middle of a breather. I hope you’re catching your breath. And I hope you’re taking this chance to look at some of the highest quality gold stocks on your radar.
A good place to start:
My research into my favorite gold stock right now.
My research into gold royalty stocks to own for the long haul.
You might not have long to buy gold stocks while gold sits at $4,000/oz…
Don’t ignore this warning.
Best,
Garrett Goggin, CFA, CMT
Lead Analyst and Founder, Golden Portfolio