Guest Post by Nick Giambruno via International Man
Last week, I laid out four reasons for why this gold rally will be bigger than anything we’ve ever seen.
I explained how central banks are buying up piles of gold… how China is using the metal to remove its dependence on the U.S. dollar… and why the Fed’s shifting strategy is bullish for the sector.
Today, I’d like to dive deeper into what’s going to trigger this revival…
No. 5: Takeover Frenzy in the Gold Mining Industry
2019 is on track to be a record-breaking year for gold mergers and acquisitions (M&A).
The world’s largest mining companies are pouring billions of dollars into mergers and acquisitions.
Three blockbuster deals contributed to this result:
- Newmont Mining completed a $10 billion takeover of Goldcorp on April 18.
- Barrick Gold acquired Randgold Resources in a $6 billion transaction that closed on January 1.
- Barrick Gold has also announced a joint venture with Newmont after a hostile bid from Barrick failed. (Barrick and Newmont are the top two gold-producing companies in the world.) The joint venture in Nevada will create the largest gold-producing complex in the world.
What these mega deals prove is that the biggest companies in gold mining think gold and gold stocks are cheap.
They show a preference to grow by buying out other companies rather than discovering and developing new resources.
If this trend continues, 2019 will go down as a record-breaking year for gold M&As.
It’s another major tailwind for gold.
No. 6: President Trump Is Pro-Gold
President Trump is a big fan of gold.
For one, he’s made a killing as a gold investor. He’s called investing in gold “easier than the construction business.”
But Trump’s affinity for gold goes much deeper. He once said:
The legacy of gold as a precious commodity has transcended to become a viable currency and an accepted universal monetary standard. Central Banks around the world are holding gold as a reserve asset.
And Trump is a fan of the gold standard… in other words, the re-monetization of gold.
While running for president, he said:
Bringing back the gold standard would be very hard to do, but boy, would it be wonderful. We’d have a standard on which to base our money.
And he’s acting on his pro-gold instincts in a big way. Let me explain…
Trump has been able to wield more influence over the Federal Reserve than any other president since the Fed was created in 1913.
He’s had the chance to fill five out of the seven seats on the Board of Governors of the Federal Reserve.
In other words, Trump gets to stack over 70% of the whole Fed board with people of his choosing.
And so far, he’s nominated several pro-gold candidates, including Herman Cain and Stephen Moore. They’re both on record as supporting a gold standard.
For example, in 2012, when Cain was running for president, he wrote an editorial for The Wall Street Journal titled “We Need a Dollar as Good as Gold.” He wrote:
Gold is kryptonite to big-spending politicians. It is to the moochers and looters in government what sunlight and garlic are to vampires.
Cain and Moore have since withdrawn their nominations, but one replacement is widely suspected to be Judy Shelton, who is also an advocate of the gold standard.
Regardless, the fact that Trump nominated them in the first place shows he is willing to act on his pro-gold instincts.
Here’s the bottom line…
Having a U.S. president who favors gold and is looking to stack the Fed with pro-gold people is unprecedented in recent history. It’s a positive development for gold – and the trend of gold’s re-monetization.
But gold is going to get a boost, no matter which party is in power…
No. 7: Socialism Is on the Rise
Socialism is on the rise in the U.S. And it’s about to be entrenched in U.S. politics.
A recent poll from the Victims of Communism Memorial Foundation, a D.C.-based nonprofit, showed that one in two millennials now favors socialism and communism over capitalism.
It’s why Bernie Sanders, Elizabeth Warren, Kamala Harris, Alexandria Ocasio-Cortez (AOC), and other socialists are skyrocketing in popularity.
This is no small problem.
Millennials are now the largest demographic group in America. And sometime this year, they are expected to surpass baby boomers as the nation’s largest living adult generation.
In other words, demographics alone guarantee more socialism ahead. And as we’ve seen again and again, when asked, “How are you going to pay for this?” socialists have the same answer: “Tax the rich!”
Simple arithmetic shows that even if the rich were taxed to the limit, it wouldn’t put a dent in the bills for the socialists’ government programs. But to this, the socialists respond: “We’ll just print money!”
In comes Modern Monetary Theory (MMT). It’s the latest buzzword coming out of Washington, D.C.
Contrary to its name, MMT is neither new nor “modern.” And adding the word “theory” to something doesn’t make it scientific or credible.
MMT is the same economic quackery that’s brought misery to Argentina, Venezuela, Zimbabwe, and countless other places. Now, left-leaning U.S. economists, politicians, and policy wonks are taking it seriously, too. They see it as a sort of “QE for the people.”
For example, AOC and Stephanie Kelton, Bernie Sanders’ former chief economic adviser, are leading advocates of MMT.
In short, America’s embrace of socialism will lead to more money-printing and currency debasement, just as it has everywhere else it’s been tried.
But this time, it won’t be the Argentine peso or the Venezuelan bolívar that is debased. It will be the U.S. dollar… the world’s premier reserve currency.
Gold is the primary competitor for the U.S. dollar’s top role. And as the American socialists inflate the value of the dollar away, it will make gold all that more attractive.
That’s why this trend will be a big positive for the re-monetization of gold.
No. 8: Gold-Backed Cryptos – A Monetary Revolution
The last catalyst for gold is cryptocurrencies backed by gold.
There are dozens of gold-backed cryptos sprouting up.
Peter Grosskopf, the CEO of Sprott, recently called gold-backed cryptocurrencies “the most important thing to happen to the gold market in the last several decades.”
Soon after, Sprott launched a gold-backed crypto it developed with its partners.
When Sprott – a leader in the natural resources industry – makes a big move into the gold-backed crypto space, it’s a definitive sign of where things are headed.
Gold-backed cryptos combine the best attributes of gold and cryptos. I can’t think of two other asset classes that have as many synergies. In other words, the whole is worth much more than the sum of the parts.
With cryptos redeemable for gold, we can now instantly send anyone anywhere in the world small or large amounts of gold – reliably and without interference. It’s nothing short of a monetary revolution.
Gold-backed cryptos are going to make using gold as money even more convenient for the average person and business. Anyone with a cell phone now can use gold in a way that was not possible before.
This is another big reason why I think gold is coming back as money.
Putting It All Together…
When you take a step back and look at the big picture, the implications for gold are clear:
- Basel III moves gold toward officially being money again.
- Central banks are buying record amounts of gold.
- Excessive U.S. sanctions have pushed countries to use gold.
- China’s “Golden Alternative” allows for large-scale, oil-for-gold trades.
- The Fed’s dramatic reversal and the return of easy money bode well for gold’s strength against the dollar.
- The takeover frenzy in the gold mining industry is bullish for the price of gold.
- President Trump favors returning to the gold standard and is stacking the Fed with pro-gold people.
- The Democrats’ embrace of socialism guarantees more currency debasement.
- Gold-backed cryptos make owning and using gold easier than ever.
Any one of these catalysts alone would be great news for gold.
But the fact they are all converging at the same time means an epic gold bull market is on the menu for 2019. And the time to get positioned is now…
Editor’s Note: There’s a revolutionary new way to profit from the coming gold rush. Doug Casey and his team have outlined exactly how you could get in on the action at the ground level. They’ve created this urgent video explaining this golden opportunity and how you could take advantage of it. Click here to watch it now.
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Until of course, as has been done in the past, the government makes it illegal to own gold.
“With cryptos redeemable for gold, we can now instantly send anyone anywhere in the world small or large amounts of gold – reliably and without interference.”
Nonsense. What we can do is send ones and zeros (pretty soon not ones and not zeros) instantly. Physical gold is not being traded. This is digital gold… as redeemable for gold and as equally reliable as paper.
To own real physical gold is to be able to stand in front of it with an appropriate weapon and defend it. A good idea.
Well, I guess I’ll just have to defend my illegal GOLD and SILVER with my illegal GUNS while trading on the illegal BLACK MARKET with other illegal AMERICANS who stand on their feet instead on living on their knees while trading for illegal GOODS.
Just like countless wise and defiant Americans did that in 1933…at least the ones smart enough and with the grit and guts to hold gold and silver.
The proud and majestic eagle use to be the symbol of America…however it has become a sick buzzard looking bird with two broken wings (one blue and one red) called the ill-eagle.
Make plans for your stand now, its coming, surround yourself with the courage of your convictions and preparations to live on your feet no matter how long you remain standing.
Nothing wrong with a quick defiant and honorable exist. I see that as a WIN/WIN. I have no intention of living as an unarmed, broke, compliant serf.
MONETARY METHADONE
If you are just interested in his Gold and Silver predictions fast forward to 36 minutes. I never, ever miss a Celente interview for many years. A street smart, brilliant wise guy trend forecaster with a kick in the balls delivery right out of a rough and tumble alley.
https://www.youtube.com/watch?v=k8YcHBqVORA&list=UUG-G8LLr38fQUNZU8K0t-EA
“Top trends researcher Gerald Celente says global central banks are just helping the richest people on the planet and have not saved the economy. Celente says, “They didn’t teach us this stuff in economics 101 or in graduate school, they made this crap up. For example, quantitative easing, you mean buying corporate bonds and government bonds and shoveling money to your bankster buddies. . . . According to the Levy Institute at Bard College, they dumped in over $29 trillion. That’s right, $29 trillion to their buddies. So, what’s the deal? They are going to keep lowering interest rates. It’s monetary methadone. All these people are addicts. Morons and imbeciles call them ‘investors.’ They’re addicts and gamblers. They can’t stop, and all they want is that drug– monetary methadone. They are just going to keep filling it in until they OD. . . . You don’t know when it is going to collapse, but our forecast is we are not going to go into a recession this year. We will begin to go into it in 2020, and the greatest recession/depression will happen by the end of 2020.”
Meh. The price of gold and silver is rigged due to combination of financial fraud and propaganda. That’s not going to end until the fake US dollar dies.
And no need to make gold or silver illegal when the average serf doesn’t even know it’s true value.
Every single market is rigged, not just precious metals.
Nothing lasts forever, including financial fraud and propaganda and obviously the dollar will collapse sooner rather than later…but I digress.
I have spent many years warning 35 family/friends ‘Serfs’ about what is coming in many ways. At least five have taken PM positions to protect themselves because of the historical facts, websites, videos, essays, and books I have sent them. I suspect a few others have, but I know these five now have a decent hedge stashed.
I realize some consider me a right wing nut but I have won many to a position that will make a huge difference in their lives one day.
https://www.youtube.com/watch?v=wLHDLjkyVe0