Gold And Fiat Dependence Day

President of Graceland Investment Management
July 14, 2021

 

The US stock market is at incredible heights and a reduction in central bank money printing could theoretically create…  an all-markets waterfall.

Many gold stock investors worry that mining stocks (already with the summer doldrums) could also crash. 

Should investors be concerned?

My suggestion for stock market investors is to use my key moving average signals.

When a sell signal happens, they can safely move to the sidelines.  At this late stage in the US stock market cycle (which, horrifically, is mainly a function of the US money printing cycle), a significant reaction is likely in the August-October period.  The good news:

A major crash and bear market for stocks probably doesn’t happen until later in 2022.

There is simply too much stock market “slush fund” money printed by the central bank and borrowed/spent by the government for the market to disintegrate now.

The main catalyst to make it happen is likely inflation.  That’s a long-term cycle, but only in its infancy now.  It will take time to become a death knell for the stock market.  Another catalyst is war (both civil and global).

What about the miners?  It’s true they are already mired in the summer doldrums and a major stock market reaction could drag them significantly lower.

 

That’s negative, but it’s not a guarantee of lower prices. 

For investors who are heavily invested in miners and worried about a crash, put options are the simplest form of insurance/protection.

For myself, I like an allocation of 60%-70% to gold bullion and fiat, and 30%-40% to miners and silver.

Another great tactic for investors is to maintain a strong focus on the support and resistance zones on the weekly gold chart.

I like to buy miners only when gold bullion is at significant weekly chart support. 

Patience is required, but from these support zones, intermediate and senior miners tend to rally 20%-30% in a month or two, and there are gains of 100% and more for many juniors!

With the above tools at an investor’s fingertips, there should be minimal (or zero) concern about a US stock market reaction or meltdown.

I cover rare earths and lithium in my junior stocks newsletter and resource investors should give them serious consideration.  Here’s why:

Going forwards, electric cars will dominate the auto industry.  That means lithium and rare earths will have minimal downside risk and massive potential reward!

This is the earliest stage of what is destined to be an inflationary era.  It starts as “growflation”, and morphs into stagflation.  While precious metal investors wait for the enormous institutional money manager surge into the gold/silver miners (a surge that only stagflation or hyperinflation can bring), the resource “grow” sectors of energy, rare earths, base metals, and lithium can be an exciting and enriching addition to any portfolio.

Note the spectacular buy signal in play now on the 14,5,5 series Stochastics oscillator.  Clearly Palladium and platinum are two more “growflation” stalwarts for metal investors to consider as portfolio pillars. 

As most investors know, I sold a lot of bitcoin and alt coins into the recent highs and urged all crypto enthusiasts to do so too.  While some of the proceeds went into gold, a lot went to platinum too!

In the medium term (1-2 years), platinum has a good chance of doubling in price against US fiat.  Some of the miners should play out as “ten baggers”. 

All in all, I think gold and silver stock enthusiasts are in a very good spot here.  There are minor short-term concerns, but I have outlined lots of great tactics and tools to turn those concerns into smiles!

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Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am-9am. The newsletter is attractively priced and the format is a unique numbered point form. Giving clarity of each point and saving valuable reading time.

Risks, Disclaimers, Legal

Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualified investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:

Are You Prepared?

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Stewart Thomson is president of Graceland Investment Management (Cayman) Ltd. Stewart was a very good English literature student, which helped him develop a unique way of communicating his investment ideas.  He developed the “PGEN”, which is a unique capital allocation program. It is designed to allow investors of any size to mimic the action of the banks.  Stewart owns GU Trader, which is a unique gold futures/ETF trading service, which closes out all trades by 5pm each day. High net worth individuals around the world follow Stewart on a daily basis.  Website: www.gracelandupdates.com.

The average human body contains 0.2 mg of gold with the bone containing .016 ppm and the liver .0004 ppm.

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