Gold: "The Most Confusing Commodity"

The truth is for U.S. consumers like you and me, the value of our dollars are actually declining as inflation continues to ramp up. Energy, food, housing… everything costs much more, making our dollars much less valuable. The truth is for U.S. consumers like you and me, the value of our dollars are actually declining as inflation continues to ramp up. Energy, food, housing… everything costs much more, making our dollars much less valuable. [Outsider Club logo] Gold: "The Most Confusing Commodity" [Luke Burgess Photo] By [Luke Burgess]( Written May 04, 2022 In an interview with Kitco earlier this week, John LaForge, head of real asset strategy for Wells Fargo Investment Institute, called gold’s price movement over the past year and a half "the most confusing of all the commodities." And he’s absolutely right. It might seem a bit discrediting for a financial analyst to admit that they’re confused about a market. But there isn’t an investor worth his salt who doesn’t expect for markets to sometimes act irrationally. We expect to be confused sometimes. Yet when assets abandon long-established habits for months or years at a time, more consideration is due. Such is the case with gold. Lithium Funding Terrorism? Your next smartphone purchase could fund the Taliban. I know it sounds crazy... But the world’s largest lithium deposits are located in Afghanistan. According to a leaked Pentagon memo, Afghanistan could become the “Saudi Arabia of lithium.” And with the U.S. accounting for only 10% of the world’s lithium reserves... we’ll need all the lithium we can get. Every single electric vehicle, 5G device, smartphone, and drone needs batteries. But one tiny company just figured out how to break our lithium dependency. It owns the patented technology to make high-performance batteries that require NO lithium whatsoever. These batteries can be 100% American-made. And early investors could make a fortune. [Check out my report on this unique opportunity now.]( Dear Gold, You’ve Changed It’s important to note that over the past 20 years, the factors that drive gold prices have indeed changed. In the years that followed 9/11, for example, gold would respond positively to civil unrest, terrorist acts, and other geopolitically shaking events. But that’s not so much the case any longer. A great example is the recent Russian-Ukraine war. Gold prices responded somewhat positively immediately after the Russian invasion. Yet today the price of gold is lower than before Putin invaded — and now there are still threats of nuclear war. If Russia had pulled the same stunt in 2002 or 2003, gold prices would have likely gone soaring. A better example of how gold responds less to geopolitical threats is the Capital riot. The United States Capitol building — the most sacred temple of American democracy — was ransacked by rioters, and gold completely ignored the event. Here’s what gold was doing on the day of the riot: [grtvtr] Or consider any of the other riots and protests that just took place a few years ago in cities across the nation. Gold completely ignored all that too. Looking back now more than 20 years later, I think 9/11 was so devastating that it may have even fueled a market for gold as a hedge for geopolitical uncertainty where one didn’t exist prior. And in the years since 9/11, gold has lost much of its appeal as a hedge for geopolitical uncertainty. But that’s not what’s confusing LaForge, or any gold bug, right now. Gold has a long-established habit of reacting positively to interest rates and unfavorable economic/stock market conditions like inflation. But as LaForge said to Kitco, “[Gold] doesn't seem to want to react to anything outside the U.S. dollar and that's been going on for a solid year and a half… The bad news is bad news and the good news is bad news. It doesn't seem to matter.” And, again, he’s right… mostly. Gold prices have been ignoring rising inflation, shrinking GDPs, and threats of stagflation. And instead mostly reacting to the U.S. dollar… sort of. Here’s the thing… Gold is actually not reacting to the exact “value” of the U.S. dollar. Instead, it’s reacting to the value of the USD Index. The USD Index is a basket of six major world currencies — and more than half of that basket is made up of the euro. [grtvtrkp] Biggest Lithium Breakthrough in History Inside one of the world’s most advanced facilities, a small 65-member team has perfected the unthinkable...This genius team of scientists has developed a technology for creating an infinite supply of super-rich lithium right here in America... WITHOUT having to mine a single ounce.That’s right! No mining at all.How is this possible? And how could it make early investors 10 times their money or more?[This developing story continues here.]( In other words, gold is mostly reacting to the relationship between the greenback and euro, and a handful of other major currencies, as measured by the USD Index. And the USD Index is at multi-year highs as the world’s central banks continue to pursue very aggressive monetary policies. USD Index — Two Years [grtvtrkpbr] A strong USD Index makes the U.S. dollar seem very strong. But it doesn’t provide a full picture of the dollar’s value. The truth is for U.S. consumers like you and me, the value of our dollars are actually declining as inflation continues to ramp up. Energy, food, housing… everything costs much more, making our dollars much less valuable. So there might be no wondering why gold prices are confused about direction. Gold prices are reacting to the USD Index, when they probably should be reacting to the dollar’s domestic spending power… or a better index. But I’ll leave you this week with something to consider. Take a look at this MarketWatch article from 2009: [grt] Change “banking bailouts” to “COVID relief” and that could have been written yesterday. That article was published April 22, 2009. Several months later, gold would go on to smash all-time price records in what became the biggest bull market for gold since the late 1970s. [We’re still very bullish on gold.]( Until next time, [Luke Burgess Signature] Luke Burgess --------------------------------------------------------------- New Battery Can Hold Enough Energy to Power 4.5 Million Homes! See this strange crane-like machine below? What you’re looking at is the future of global energy. Let’s face it. Our current storage systems are useless. As Bill Gates says, “Batteries today aren’t in the same league [as the Newton Battery].” Not only do lithium-ion batteries, sodium-sulfur batteries, and hydrogen fuel cells have safety and life-cycle issues… But the large reservoir systems currently holding 90% of the world’s energy storage are difficult to find and expensive to construct. That’s all about to change with this device that I call the “Newton Battery.” In fact, it’s expected to reorganize the energy industry overnight! This crane-like structure stores power and uses common, inexpensive industrial materials like steel and concrete, making it the cheapest storage battery to produce on the market! But the best part is that once energy is stored in this battery, it lasts FOREVER. Unlike the lithium battery that constantly leaks power… the charge in this battery NEVER depletes… Providing you with an unlimited supply of clean energy available 24/7! And the tiny company behind it has already inked deals with some of the largest Fortune 500 corporations in the world with DOZENS more in the pipeline. [That’s why I urge you to take immediate action](, before this device begins providing an uninterrupted supply of clean power to the entire planet. Browse Our Archives [Ukraine vs. Russia: The First Country to Fall Will Be Neither]( [U.S. Government Targets Elon Musk for Twitter Purchase]( [Stagflation Isn't Coming. It's Already Here.]( [The “Arsenal of Democracy” Is Being Rebuilt]( [Why Walt Disney (NYSE: DIS) Is a Buy]( --------------------------------------------------------------- This email was sent to {EMAIL}. It is not our intention to send email to anyone who doesn't want it. If you're not sure why you've received this e-letter, or no longer wish to receive it, you may [unsubscribe here]( and view our privacy policy and information on how to manage your subscription. 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