As we kickoff 2021, look at this email about gold from a KWN reader out of Australia.
“A Very Sobering Experience”
January 1 (King World News) – Everyone at King World News would like to wish all of our readers and listeners across the globe a Happy New Year! Here is a fascinating email from a KWN reader out of Australia regarding gold: G’day Eric, Here’s a perspective from down under (Australia) about the calendar year 2020 that has just concluded. It’s in gold ounces and comes from a very plain Jane middle class perspective, though it should be noted – I’m an airline worker. So the Covid19 shutdowns had a pretty dramatic and direct affect on us, with 6 calendar months away from the regular job.
The four data points, from start of year to end, do paint a picture showing how a core gold holding has helped us weather the income storm.
Measuring yourself in terms of gold can be a very sobering experience. These figures can read pretty ugly! I’m not just sharing the winners with KWN, that’s for sure.
But the truth can set you free, and putting yourself up against gold is the best way to get the clearest picture of your financial health or lack thereof.
I’d encourage everyone to do so, especially when heading into a hyper-inflationary world where nominal prices will at times appear totally out-of-whack and highly confusing.
INCOME (from all sources)
2019 – 46.3 Ounces
2020 – 35 Ounces (-24.4%)
A gut-wrenching blow of 24.4% of income in terms of gold. Nominally in AUD it’s “only” down 14.1% (~AUD$14k). But with appreciation in AUD gold this year of 14%, wages were never keeping up with dollar value destruction. All core gold stock holdings that pay a dividend in my portfolio increased them substantially this year too. Not enough to cover my regular income, but helpful none the less.
TOTAL NET WORTH
2019 – 329.7 Ounces
2020 – 309.2 Ounces (-6.2%)
In such a tough year income wise, TNW is not as bad as it may first appear. The rising AUD gold price has capped any TNW growth. And out performance of physical gold has helped enormously in keeping this figure so relatively small. Gold stocks performance is discussed in the next point. Also to be noted, some silver was bought at 1:120 gold/silver ratio. That’s helped the paper loss here to be quite easy to live with, the ratio now being closer to 1:70.
INVESTABLE FUNDS (doesn’t include home equity)
2019 – 197.3 ounces
2020 – 180.3 ounces (-8.4%)
A story of underperformance of the gold shares relative to gold. As KWN has shown many times, the miners have never been cheaper. Though some individual gold miners have done a lot of heavy lifting this year to keep this figure digestible. Not least a KWN pick – Maple Gold Mines. Fortunately I picked some up here at USD0.05 each (averaging down on total holding to about USD0.10). These are up over 377% (in AUD terms) in 9 months or so. Thanks to KWN for that one.
TOTAL DEBT
2019 – 136.4 Ounces
2020 – 117.1 Ounces (-13.6%)
Here’s where Gold did what gold does best. Though nominally debt is only down 1.8%, in gold terms thanks to a rising AUD gold price, we are down 13.6% in total debt in gold ounces.
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Like I suspect some fellow readers of this site, I’ve missed buying a ticket to the greatest fireworks show on earth being Bitcoin. I got my front row gold and silver show tickets where it looks like someone soaked them in a bucket of water before trying to set them off. We will have to sit and wait patiently while the party goes on next door.
To miss a +270% (AUD) run always hurts, and it is certainly spectacular to watch. However I do remind myself that in reality I wouldn’t have committed more than a tiny speculation (one ounce of gold maybe) to a bitcoin investment. More went into Maple Gold Mines, and I’ve seen a better on paper return anyway…
Billionaire Eric Sprott just bought a 20% stake in a mining company
to find out which one click here or on the image below
And I like a company that has a real resource in the ground, has the prospect off finding more, teaming up with a major, having potential future revenues, generating free cash-flow and paying dividends…so I’ll not dwell too much on the missed bubble in Bitcoin. The hardest thought is not really that I’ve missed Bitcoin, but that Bitcoin is doing what we want and thought gold would do!
I look forward to a better run in gold and silver in 2021. Hopefully this time, the mining stocks can come along for the ride. If anyone thinks they’ve missed the boat, just remember the HUI is still down 46% on this time 10 years ago, despite a 26% rally this calendar year. And a gold price thats 83% higher (in AUD) than a decade ago.
With our position in gold and silver established, this year will be a little different on the investment front. Pay down debt – increase income. Those are the goals.
All the best for all KWN readers and thanks Eric for the work you do.
Cheers,
L.C. from Queensland, Australia
Also Just Released: Another Gold Record Plus A Final New Year’s Stop CLICK HERE.
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