As we continue to kickoff trading in 2021, here is a look at gold and the war against your wealth.
Industry Guru Says “Gold Not an Investment”
January 6 (King World News) – E.B. Tucker: Gold gained 25% in 2020. That doesn’t make it an investment.
To be clear, I believe last year was the first leg of something much bigger for gold. Anyone who knows me well will tell you I’m a huge fan of the yellow metal. At a local social club my locker reads, “Gold Bug.” Last month I had a big gold crown installed on a problem tooth. I even wrote a top-selling book called Why Gold? Why Now? laying out one of the clearest cases for much higher gold prices. Yet I’ll still tell you, gold is not an investment.
While gold gained 25% last year, my largest gold investment gained 128%. Looking back over the last 4 years the value of gold rose 65% against 946% for my gold investment.
A gold investment can multiply the gains of physical gold
An investment is an economic interest in something productive. It’s a farm yielding crops, an up-and-coming piece of real estate generating rent payments, or shares of stock in a growing company. In each case, buying an interest means betting on things evolving for the better. If it goes well, the investment grows in value.
Gold is different. It doesn’t evolve. In fact, it doesn’t do anything. Gold is money. It’s reliable money. That’s worth more and more at a time when money as we know it is in trouble. However, that still does not make it an investment.
The War Against Your Wealth
The value of government money hasn’t held up well over time. Politicians can’t help themselves when given the power to spend tomorrow’s hard-earned dollars today.
For example, take a look at this chart from my book. It shows the purchasing power of $1 going back to 1900. Simply put, $1 in those days gave you the buying power of at least $30 today.
$1 once had serious value
These days you might not even pick a $1 bill up off the ground. Back then it bought you a bag full of groceries. It had serious purchasing power. Over time, it lost that power. Gold on the other hand held on to its purchasing power.
The chart below shows the value of gold over the same time period. You’ll notice the value of that $1 more than kept pace. $1 worth of gold back then still has serious value today.
Gold held value while government money did not
The way this works on a personal level is simple. If your ancestor swapped $1,000 hard earned dollars for gold at the beginning of that chart, it’s worth around $90,000 today. Meanwhile, that same $1,000 today barely pays one month of rent at a dumpy apartment.
Gold protects wealth from governments with a bad history of destroying it. That makes it a safe haven, not an investment.
Multiplying Higher Gold Prices
The 25% gold posted last year might be just a warning shot. Endless rounds of stimulus, universal basic income, and borrowing binges were once radical ideas. Today they’re normal.
If these trends continue, gold is an essential tool for protecting hard-earned savings. It can also be a major windfall for certain gold investments.
The gold investment I mentioned earlier is a royalty company called Metalla Royalty & Streaming (NYSE:MTA). I’m a shareholder. I’m also a director on the company’s board.
Founded just over four years ago, Metalla now owns 62 royalty assets. These royalties entitle the company to a certain percentage of the gold or silver found on those properties. The company does not own these properties. It also does not help companies find, discover, or produce the gold. It merely takes its cut as the gold comes out of the ground.
This is a fork in the road for gold and gold investments. If gold sees a 25% annual increase that’s good for metal holders. It’s extremely good for a company with claim to thousands of ounces set to see production in the future.
***To listen to Danielle DiMartino Booth’s powerful audio interview about gold, silver and what surprises to expect in 2021 CLICK HERE OR ON THE IMAGE BELOW.
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