Reminder: today is the day I’m adding a new company to my GPIV service: my lowest cost research focused on giving you an overview of the gold market’s best opportunities. You can try out a risk-free membership to GPIV here.
The global market is ignoring gold once again. We’re in a good spot. Prices have leveled off after a big correction a month ago.
But the news cycle is full of gold-bullish stories.
I’ll run down a few that caught my attention over the past week or so.
Starting with Russia banning the export of gold… Russia now joins China (which ended gold exports in January of this year) as another major country putting up a wall to keep gold in.
By global ranking, Russia is #2 in gold production, only slightly behind China…
You have to wonder how many other major gold producers will clamp down on gold exports. If you were a sovereign nation, would you want to see your gold whisked away to foreign markets? Probably not.
A week ago, the U.S. Treasury announced a $15 billion Treasury debt buyback – the biggest ever. The news dropped on April 1st, but unfortunately, it’s not a joke.
You might be scratching your head, recalling thinking to yourself “doesn’t the Treasury normally sell Treasuries?”
Yes, normally… that’s how the US government funds the difference between tax receipts and expenditures.
Now it’s buying Treasuries – seemingly because no one else wants to. Would you loan the US govt money at 4.2% for 10 years? I wouldn’t.
The “Treasury buying Treasuries” is one of the first steps of what’s called “debt monetization” where the Central Bank simply prints money to buy assets to keep them solvent.
It’s 3rd world banana republic nonsense.
Meanwhile, China continues to ditch Treasuries and buy gold:
The Chinese now own fewer Treasuries as a percentage of their balance sheet than they did in the late 1990s. And the number is still falling.
The reason? China sees the same thing that every other gold buyer sees: the dollar is structurally doomed for the long term. The only way to maintain debts and deficits is to continually print. Trading a doomed paper asset for gold is a no-brainer for China…
Punctuating this reality: President Trump just announced that he wants a $1.5 trillion defense budget. The largest in US history.
The US budget hasn’t paid for the last half a dozen wars, and we’re waging more of them. The only way to fund them is with debt and printing. Debt to pay for the war, and printing to fund the debt!
War in Iran is clamping down gold’s price, for now. But there’s lots to be excited about. These news stories are just a few examples of reasons to be bullish on gold – and they’re just from the last week or so. The world’s financial indicators and bellwethers are all pointed in a direction that is bullish for gold.
Many companies are selling for bigger discounts to their net asset value than they were a year ago…
Starting with my latest addition to GPIV – which you can sign up to learn about here.
It’s a company that didn’t even exist a year ago, and now it’s being run by some of the best in the business. This is a ground floor situation, and you can get started now.
Best,
Garrett Goggin, CFA, CMT
Lead Analyst and Founder, Golden Portfolio