Gold news

 if you think you're going to enter a gold cycle and silver is not g to also lead the way to the upside I think you're out of your mind I think that's gonna happen and so to me you know there are some things that have not yet changed and we're seeing all these uh reasons right now where gold is is very much in in the very beginning of what I think would be probably the most important bll market for the metal uh since the 19 the break of the gold standard 19 [Music] 71 hi I'm welcome to this video I've got

Tavi Costa with me once again uh from crescat capital crescat capital at cres cat.net am I correct there Tom that's right hi Mike how are you good good so uh you just put together a few charts uh for us to take a look at and I I always find your stuff interesting your research is great so let's go over some of this because gold was over 2,000 today and so tell us about this first chart it's it's fairly obvious because it says right on it that's right that's right that's the idea is to to leave it

as obvious as as possible but it's it's incredible what's going on with gold and such an important you know asset globally and it tells us so much about the health of the economy and health of all all most of the imbalances that we currently have in the macro world and this chart is only showing you that we are about two percentage points away from making new highs in gold prices uh as you know very well we've had a triple top recently technically triple tops never hold or I should say almost never

hold and uh we're likely going to see a breakout from gold here very soon I mean the economy continues to deteriorate significantly we're we're now seeing the steepening of the Yol curve after deeply inverted um we're starting to see after earnings releases uh some issues as well in the macro data of those companies um all that is is sort of pointing to the direction that you know what we call the the trifecta of macro imbalances the debt problem of the the 40s the inflation of the 70s uh and the

valuation problem of the 1990s is is basically playing out where it really constrain policy makers uh to uh and it's time to be allocating Capital towards hard assets what a better hard asset than than gold and so you know this is just a to me it's it's a setup for uh for a wealth generation period for folks that are F that are really uh able to uh to shift their attention towards uh this industry that is likely to uh to really do very well and perform well in this environment so uh this

obviously just my view it's not just a commodity it's also money and uh yeah so even if Commodities didn't do well and they're probably going to do quite well over the next few years uh gold and silver in a crisis uh will just outperform everything so we are just uh two and a half percent away or actually it's less today isn't it less that a slightly less today we're we're making or a progress towards making new highs and you know the next chart is which is showing out on screen

it it really just brings it home this whole topic about why owning gold today where when you think about allocation towards the metal currently it is one of the lowest we've seen in history it is severely underallocation so this chart is showing you different bars of different years and at the very beginning of the chart on the far left is essentially showing you that 71% of financial revisers hold less than 1% of gold in their portfolios and this is shocking right because gold is starting to make new highs

um and you think about what's happening there's traditional investment portfolios and there's also central banks they have different uh types of I would say Goals when owning the metal um central banks want to enhance the quality of their International reserves because they have a monetary system to Anchor uh that theat currency towards in majority of times uh majority of the larger central banks have started to accumulate go we're yet to see this transition happen across most traditional investment uh perform

that still own a large percentage of 6040 allocations where a large majority goes to equities and bonds uh as we see the bond market really uh continue to show some some some problems uh in terms of not only downside volatility and other issues it is likely that gold will start becoming a larger percentage of those exposures and so this CH it's quite remarkable to me and uh and an important aspect of why we're going to see probably a gold cycle yes I I find it amazing too and uh if so for uh people looking at the chart uh

from the beginning of the chart there the I guess that's a blue bar to the purple bar is all zero to 1% uh allocation so 71 of them have less than 1% which probably means about 70% of them have none and one of the 71% has uh has 1% allocation uh but most of those have absolutely no exposure the next Group 1 to 5% uh this this is just unbelievable and it shows you the opportunity because uh in a crisis uh this chart will sort of reverse and the bars on the uh other side of the chart let me see this way for the uh uh are go

the 10% or more is going to have that 71% allocation but it's going to be they all come everybody chases yesterday's news so they're all gonna come rushing in at the end where they've missed the really really big gains uh when you know during a time like this where we've got Wars all over the where we've got um uh these risks in the financial system when we're coming off the biggest bubbles in history uh that's the time to take a position uh in the safe haven asset when

nobody else is allocated there and then wait for them to rush in right that's right that's right and you know what is interesting is what you just said the sentiment uh is remains quite bearish on on gold and one reason for that is has been the over allocation towards bonds and it's it's remarkable that the media remains you know extremely bullish in those instruments in fact they this is a print I also have the actual newspaper in front of me but uh it's a picture that I took over this weekend but it's

the the cover of the barrons was essentially saying time to buy bonds um you know usually those magazine covers never end well and so be very careful reading those those headlines right I believe it was 1937 or8 or maybe 39 where Hitler was the man of the year on life and so yes magazines usually seem to get it wrong the mainstream press or I think in 2019 someone also coin the phrase of the death of inflation along those lines and one of those you know very large headlines which was precisely you know

the the the bottom of of of consumer prices as well and it's it's really remarkable how uh how the media tends to be you know backward looking but you know to your point you were referring to the Wars breaking out you you know defense spending remains at alltime lows today so we haven't even seen you know the government start to really uh ramp up their uh the fiscal uh agenda towards military uh military spending overall um and you know I we're see that uh spending I think our deficit is going up

by about a trillion dollars every quarter or something it's just totally insane and and have you seen the CBO the Congressional budget office uh uh recent estimates to the next decade we're going to see a budget of about 6% of GDP for the next decade so if you just take that as a rule 72 it will take about 12 years to double the debt from here so 33.6 trillion dollar issue of treasuries in the next 12 years that is not assuming a recession not assuming we're going to be in a wartime regime not assuming a lot

of other things that could potentially happen even China us conflicts and other things that could you know certainly are on on the cards here so know it's quite uh um it's scary this imbalance in the fiscal side and you know it's the main reason why I think uh gold is is uh is is going to start becoming more and more of of of a alternative for those traditional portfolios over time yeah you know uh if you if you go and look at the uh old Congressional budget office estimates they all always

make a a gross error to painting a Rosier picture so they're already painting a pretty bad picture but the reality will end up being twice as bad as what they are painting right now uh this is you know I had uh one of my researchers years ago uh go back and study the estimates uh for uh the the budget the future budget deficits and then the reality and uh they're usually off it usually comes out about double whatever they project so take your rule of 72 and their current projection and then double

it I I just think it feels like we're in this end game for the currency right now what do you think it it really does I mean uh this next chart uh that we're looking at kind of your point hi I just wanted to take a moment and thank you for subscribing and mention that if you'd like to help our Channel please consider my company goldsilver.com the next time you buy precious metals we're one of the most trusted names in the industry our prices are sharp delivery is fast and we have

an insiders program where you find out exactly what I'm doing with my own Investments thanks for making goldsilver.com your dealer and now back to the video um it's just basically the performance of gold relative to us treasuries I believe we used this in our prior presentation however it's such a relevant um data as well to to be looking at and and thinking about prior gold cycles and how gold really outperform us treasuries in a very significant way um you know despite yields moving higher which was I think

was a very contrarian uh view not too long ago and a lot of I would say the largest argument against owning gold has always been but it doesn't yield anything well uh if if you're biggest argument is to own debt from another country that is largely indebted and issuing treasuries right and left it's you know I think there's a better case here for a hard asset like gold uh that in fact during that period you're looking at that gold cycle the first one in the 70s gold was rising at about 40%

annualized rate and so you know how does that compare with 5% interest rates right now and I'm not here to claim we're going to see 40% for the next 10 years 10 years or so but I I do think there's a very strong case that gold will perform much better than a 5% yield on treasuries personally so um I think there's a there's room for those and you can see here in the early 2000s as well the gold cycle which lasted about 10 years uh where gold was um very different Market we're talking more

about China entering the WTO and you know becoming the manufacturing plant of the global economy uh we've had a commodity bull market at that time and so now um now there's there's all sorts of of triggers in in this environment is the central bank's accumulating gold the 6040 portfolios yet to remove that Bond allocation towards gold redeploy that Capital um there's a production of gold is still declining across most of the major companies uh the imbalances that I referred to the trifecta and so I think

there's a you know I I don't think we've ever seen a time when uh there has been such a large amount of of plator of of of reasons to own the metal and sentiment remains so bearish I mean can you recall another time like this no it's it's remarkable it's just totally insane yeah um so here's another chart Mike I think was shocking to me and not sure if we be I think it will be shocking for your viewers too um there is all this talk about magnificent 7 the the large seven

uh companies in in the S&P 500 have been contributed to most of the performance in the markets year to dat and so forth and we've seen what we call the the generals are leading but the soldiers are not following right and where the broad Market's been down and we're seeing a lot of issues fragility in markets overall despite the fact that those large companies have been doing well but more interesting to me is if you break down even further from the Magnificent 7 and look at the top two

companies I call the Magnificent 2 um top two companies weights in the S&P today is Apple and Microsoft they make up about 14% of the overall index that is more than four sectors combined that's the bar in Gray and then the green lot uh bar is just separating energy itself because energy is such a an essential portion of the economy uh that I think it you know really uh justifies a much larger representation of this index over time and more importantly would be how in the world we go from reshoring developed economies uh

improving and revamping all those manufacturing capabilities uh completely changing electrical grids doing a uh successful shift towards a green energy um making housing more affordable by building more homes without making the metals and mining industry much more relevant as a percentage of the overall index which is the S&P and today that is about 0.2% weight in that whole uh market and so to me that's that is another it screams a symmetry screams opportunity um especially if gold breaks

out right so you know you you pointed out earlier to me that uh that 0.2% also includes base Metals not just this isn't just precious metals this is copper and iron everything else it's crazy it is crazy uh you know it it's we we were talking about the reasons to own gold and yet we're about to break out to new highs and I believe we will and so forth and we start a new cycle for gold and the sentiment is so bearish but it's not just a sentiment there's not just a Divergence on sentiment and prices

there's also a Divergence between prices of properties that have resources of gold relative to the gold price too um the there's also another large Divergence between gold prices and silver I mean if you think you're going to enter a gold cycle and silver is not going to also lead the way to the upside I think you're out of your mind I think that's gonna happen and so to me you know there are some things that have not yet changed and we're seeing all these uh reasons right now where gold is is

very much in in the very beginning of what I think would be probably the most important bold market for the metal uh since the 19 the break of the gold sender 1971 yes I I I believe you are absolutely correct you know uh in our in your last video with me I believe you showed the chart of inflation comes in three waves and you had this thing you are here and uh you know I W you you showed um uh how gold was outperforming bonds that chart that we just saw uh I just want to point out to everybody that

when gold was doing 40% return or gains year-over-year uh that was during a period of time where bonds had negative real yields were dubbed certificates of confiscation because because they lost you know you lost if you were in Bonds in the 70s you were just continuously losing part of your wealth yeah uh even when bonds were paying double digit uh yields they were still going negative it was gold that was going positive that doesn't have any yield it just had capital appreciation during that time

but the capital appreciation was so far beyond inflation that you made these enormous gains you know uh one of the things that uh I cover in my book and I covered in in video I think I covered in my first book as well uh was uh if you had purchased gold or silver on you know in 1971 uh and then you know sold a home your home purchased gold or silver in 1971 by the time you got to n January of 1980 uh I can't remember I think it was nine you could buy nine of the exact same home uh with gold and I think it

was 17 uh of the exact same home if if you sold your silver uh and so this is true inflation adjusted gains in wealth in value not gains in price uh so uh these are very very revealing charts and you're absolutely right I mean this is the time uh to be going into these things so what's next next is yeah this is gold versus all major some major currencies not all of them that they're more including the dollar is not part of this six-pack of charts that we have here which is looking at Gold versus

zero British bound Chinese one Australian dollars Japanese Yen and also the Korean one and the next one in line which I think is the case is is gold and US Dollars making new highs and it's so important to see this this the basement of global currencies that we're seeing uh not only not it's not only gold I mean all other hard assets are also you know doing very well performing really well in this environment and to your point prior I mean in an inflationary era an investor in my view needs to

focus on two things obviously there's a lot of other things you should focus on but in terms of allocation and and deploying Capital into Investments you really need to think about hard assets number one number two is looking for businesses that having that that have pricing power and it is so important to find why commodity businesses do well in in inflationary periods well because they have an inherent pricing power in their their businesses um their underlying commodity price of their businesses which is hard assets tend to

do very well in those periods and therefore they have pricing power and so you tend to see an improvement of those fundamentals over time along with Metals along with other Commodities overall so it is a very important part of how to really survive in this kind of inflationary era which I think uh not necessarily inflation would be worse in the 70s or anything like that but I think this is much worse of a problem than we saw back in the sevens we didn't have the debt problem we have currently

and the reason why the economy haven't really please go ahead go ahead I absolutely agree uh Dan could you put that chart back up for a minute okay so one thing I want to point out to all of the viewers is if you took this chart and flipped it upside down that is the value of the currency falling against gold that's right right that would be uh that would be another way to say it um certainly and it's probably the right way to say it um and it's very unfortunate and you know the reason I

think Mike that we haven't seen much more spilled over the economy in terms of this you know if you think about how lever the global economy really is and we're seeing signs of of of kind of the valve the scape valves of of markets like gold doing very well um and starting to break out in many different currencies as his sh proposes but um if you think about why we haven't seen further downside in the global economy in my view the main reason for that has been because we haven't seen most of

those companies and individuals and Sovereign institutions really start refinancing their debt when they start refinancing their debt at much higher rates it is sort of obvious that we're going to see interest payments across all those institutions to go severely higher either relative to GDP relative to their revenues relative to their income and that is when you start seeing the financial conditions really tighten and showing problems which I think are going to be very stagflationary in their

nature uh and it's so important to have allocation towards the meow in that environment yes yes okay I want to thank everybody for watching and I want to thank you tvi for giving us this great presentation on your research so tell people about your company real quick it's been my pleasure Mike by the way uh well we run uh cresc Capital it's a hedge fund uh if you have any questions you would like to learn more about what we do our website is k.net and we have a lot of research letters and things uh

that hopefully offer some value in terms of understanding uh the macroeconomics side but thanks again for having me I really appreciate always talking to you okay thank you and thank the audience for watching we'll see you next time bye thanks hi I just wanted to tell you about gold Silver's 111 o Silver giveaway where you can win win win one one one 1 oz silver bar one 10 oz silver bar and one 100 o silver bar so enter today and win