Gold Finally Starts to Shine as the Fed Panics
We’ve covered a lot of ground regarding the Everything Bubble in the last week…
As a brief recap, let’s outline the key points:
- After the Great Financial Crisis of 2008, the U.S. Central Bank (the Federal Reserve or “the Fed” for short) created a bubble in U.S. government bonds, also called Treasuries.
- These bonds are the bedrock of the current financial system. Their yields represent the risk-free rate of return against which all risk assets are priced. So when the Fed created a bubble in Treasuries, it created a bubble in EVERYTHING.
- The Everything Bubble officially burst last year when Treasury yields broke their long-term downtrend. Since bond yields are interest rates, we prefer to see these staying low.
- The Fed is now in the process of attempting to “patch over” this bursting bubble. To do this, the Fed will resort first to rate cuts… and then to gargantuan Quantitative Easing (QE) programs.
Put in the simplest terms possible, the Fed created a bubble in Everything by engaging in extreme monetary policy. That bubble is now bursting, so the Fed will attempt to fix it with even more extreme monetary policy.
The question for investors is… What investments will perform best during this period?
The first one that comes to mind is Gold.
Gold: The Antidote to Central Bank Insanity
Since peaking at a little over $1,900 per ounce in 2011, Gold prices have been consolidating for most of the last eight years.
This consolidation has resulted in the precious metal forming a clear triangle pattern (blue lines in the chart below) as it moves in a tighter and tighter price range…
Now, these formations typically precede massive price moves.
And as the Everything Bubble began to burst and the Fed began to panic, Gold has recently broken out of this formation to the upside.
This recent move in Gold is a clear signal that the precious metal is preparing for another bull market.
I expect we’ll see Gold eventually move north of $2,400 per ounce in the coming years as the Fed is forced to print even more money in its attempt to “patch” the Everything Bubble back together.
I want to warn you that we won’t get there quickly… so don’t rush out and bet the farm on a rapid rise in Gold.
However, with the right investments and careful risk management, those investors who are properly positioned for this will make literal fortunes.
On that note, I’m about to tell subscribers of my Strategic Impact newsletter about a unique play on Gold that has the potential to DOUBLE in the coming months…
I’ll let you know when it hits ― along with how to access it.
In the meantime, if you have any questions, comments, or feedback feel free to send them here.