Rick Rule on Gold

Rick Rule rolled out some golden nuggets on Friday. May 06, 2024 [WEBSITE]( | [UNSUBSCRIBE]( Rick Rule on Gold SEAN RING Dear Reader, Last Friday, I got to speak with Rick Rule about gold. That, combined with my chat with Doug French the night before, means I had a great week brain-wise. We’ve already posted[my interview with Doug on the Paradigm Press YouTube channel]( so head over there to watch it when you’re free. Rick’s interview will be posted as soon as possible, but in the meantime, I had the weekend to reflect on it, and share my thoughts with you here. Gold is Insurance. You would’ve also heard this in the Doug French interview since great minds think alike. Rick isn’t excited by gold going from $2,000 to $2,400. Rick’s always owned gold, so he experienced the “Brown Bottom.” That’s when former Chancellor of the Exchequer (The UK’s equivalent of the Secretary of the Treasury) Gordon Brown announced he was selling all of the UK’s gold. Of course, traders front-ran Her Majesty’s Treasury and knocked the gold price down to $250/oz. This idiotic move cost the UK at least GBP 5 billion. Thanks to this “diversification strategy,” Gordon Brown can’t get an after-dinner speech gig. Suffice it to say, you hold gold because you’re worried your government will inflate its currency to the moon. Not because you’re looking for a few hundred dollars in profit. Returning to Average Holdings Means $8,000 - $10,000 This was my favorite part of the interview. First, let’s define a term. “Mean reversion” or “reverting to the mean” is something finance people say instead of “going back to the long-term average.” Trust me, finance is a cupcake major, so we have a bit of a Napoleon Complex next to economists. Rick mentioned that a portfolio's long-term average gold holding is 2%. Right now, the average holding is 0.5%. That means if retail starts to buy again to get their holdings merely back to 2%, the gold price will quadruple. At today’s prices, that’s anywhere from $8,000 to $10,000. This isn’t clickbait. It’s mathematics. [Bloomberg: “Elon Musk Will Become a Trillionaire With [This Company]”]( As soon as December, Elon Musk could take yet another company public… One that could instantly become the biggest IPO in U.S. History… AND make Elon the world’s first trillionaire in one single move. But it won’t just be good for Elon… Because technology analyst Ray Blanco discovered another company… One that could be a hidden “backdoor” way to profit thanks to the ‘trillionaire-making’ company Elon is building right now. [Click here for the full story](. [Click Here To Learn More]( Why $10,000 Gold is Frightening With the above said, a $10,000 gold price is nothing to celebrate. Yes, if you’re long gold, you’ll have made a ton of money. But the purchasing power of the dollar will have been quartered. And that’s the stuff of nightmares. Using the Rule of 72 and the current (erroneously calculated) CPI of 3.5%, the dollar’s value will halve in just over 20 years (72/3.5 = 20.6 years). That’s bad enough. Imagine the price of a liter of milk going from $1.30 to $5.20. It’s horrifying. Trump or Biden? How About Neither? Rick shared a wonderful anecdote about voting for President. He knew the late, great Harry Browne, author of How You Can Profit From The Coming Devaluation, How I Found Freedom in an Unfree World, You Can Profit from a Monetary Crisis, and Fail-Safe Investing: Lifelong Financial Security in 30 Minutes. Harry was the Libertarian candidate for President in 1996 and 2000. Rick recounted the pleasure of pulling the lever for his friend Harry. I remember feeling the same when I voted for Bob Dole instead of Bill Clinton in 1996. It’s easy to not vote for Biden. Many find it hard to vote for Trump. Rick will be voting for neither. To Hell With Retirement! If there’s one thing Rick has failed at in life, it’s retirement. While Rick is still Sprott’s largest shareholder, he’s no longer on the board. This is excellent news for us. First, Rick will grade your natural resources himself(!) at [Rule Investment Media](. I will be taking advantage of this fantastic service this week. Second, Rick, with Albert Lu, founded [Rule Classroom]( in 2022. Rule Classroom is an online learning community for natural resource investors. Here, you will find video courses, interviews, and a community of natural resource investors to learn from. Basic membership is free. Third, Rick still hosts his eponymous [Rule Symposium]( every July in Boca Raton, FL. As the nation’s premier annual event on resource and commodities investing, The Rule Symposium has built an unparalleled reputation for delivering the most profitable insights in this sector – year after year. I hope you take advantage of these great offers. (FYI, while I wholeheartedly recommend each of these, you must know neither I nor anyone else at Paradigm Press have any financial incentive to do so.) Wrap Up We’ll post Rick’s full interview on the Paradigm Press YouTube Channel as soon as possible. It’s chockful of golden nuggets, many of which I’ve not written about here. And take advantage of Rick’s generous offers. A successful investor like Rick rarely opens up like this. Our gratitude should be our participation. Finally, I apologize for today’s short Rude. It’s my first time writing from the new house, and I had a hell of a time hooking up to Starlink this morning. It’s not Elon’s fault, but mine. All the best, Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( Rate this email Like Dislike Thanks for rating this content! Looks like something went wrong. Please try to rate again. In Case You Missed It… Trump’s Problems SEAN RING Yesterday, I had a fascinating discussion with my esteemed friend Doug French. Doug, the President Emeritus of The Mises Institute and the acclaimed author of Early Speculative Bubbles & Increases in the Money Supply and Walk Away: The Rise and Fall of the Home-Ownership Myth, always brings a wealth of knowledge and experience to the conversation. Doug received his master’s degree in economics from UNLV, studying under Professor Murray Rothbard and Professor Hans-Hermann Hoppe. In fact, both of them signed his master’s thesis, which was the first version of Early Speculative Bubbles. Doug is the most precise writer of anyone in the Austrian School. In fact, his style reminds me of Murray Rothbard’s crystal-clear economics writing. (Pro tip: Tom Woods recommends that people start with Austrian Economics by reading Rothbard’s Man, Economy, and State first. Then, they should read Human Action by Ludwig von Mises, as it’ll make much more sense. This is excellent advice, and I wish I had done the same.) We’ll post that conversation on the Paradigm Press YouTube Channel soon. But something Doug said last night got my mind churning. Doug is no Trump man by any means. And yet, he was fair when I asked him who he thought would win this November. Biden’s Two Issues Doug said Biden has to convince the American people he can solve these two problems: Inflation For inflation, scolding the American people by saying they’ve never had it better won’t cut it. Minions like The Wall Street Journal’s Greg Ip writing puff pieces like “[What’s Wrong With the Economy? It’s You, Not the Data]( will only hurt Biden’s cause. As I’ve written before, if a product initially costs $1 and then suffers inflation of 10% the next year and 5% the year after, it will cost $1.16. All Americans see a product that costs 16% more now than it did back then. They don’t say, “Good job, Mr. President! You cut inflation in half!” (From 10% to 5%.) People inside the Beltway, especially the Fed’s economists and Congress’s reckless fiscal spenders, need to figure out how to introduce some deflation (lower prices) into the system, not just disinflation (prices going up at a slower pace). The Southern Border Yes, Trump didn’t build the wall. But Biden made the problem much worse by practically inviting people to travel through Central America and Mexico to hop the Rio Grande. Biden also tore down the wire fencing Texas put up. And when illegal immigrants were bussed up North, he did nothing to ease the situation for the natives. Though the mainstream media may suppress any notion Americans feel less safe with migrants, they do, and they’ll have their say in November. [Nearing Retirement? Claim This Exclusive $1 Book Offer Right Away!]( “The Banker” is a hedge fund titan who spent years helping America’s richest families grow even richer. [And today, for the first time ever, he wants to send you his new book – where you’ll find 36 of his never-before-revealed income and wealth generating secrets](. If the potential at steady, predictable income (as well the chance at a few nice, quick windfalls) interests you, then I urge you to act right away. [Click Here To Learn More]( Trump’s One Big Issue Abortion I must admit this surprised me. Doug said many people will travel to the polls to vote against Trump just on this issue. I find that utterly frightening. The question is this: will those voters travel far inside red states to vote against Trump? If so, we’ve got ourselves one hell of a horserace come November. Trump’s Other Big Issues These were the thoughts churning in my head last night. I think Biden is a clown and can’t believe people would vote for him (again!), but truth be told, Trump is lucky his base overlooks his glaring flaws. Here are five of them. Trump won’t cut spending. Trump is a spendthrift, himself. Ok, he’s nowhere near Biden’s level. But if people think he will morph into Bill Clinton in his second term, they are sadly mistaken. He’ll order the Fed to lower rates (though he doesn’t have the power to do so), and that’ll give him room to spend. Trump likes vaccines and lockdowns. The “my body, my choice” crowd from above has no problem forcing you to get a government-mandated needle, even if the vaccine is unproven. Oh, the irony. Germophobes like Trump still think they saved millions of lives with medicine that didn’t halt the spread of anything. Likewise, the lockdowns were a disaster of global economic proportions, and we’re still feeling the effects. But Trump, not Biden, initiated those lockdowns to flatten the curve. We must hope this never happens again. But if it does, we must fight it. Trump will try to politicize the Fed. The Wall Street Journal just ran a piece titled, “[Trump Allies Draw Up Plans to Blunt Fed’s Independence]( Let’s be honest: The Fed has never been entirely independent - [remember Arthur Burns?]( - but at least the President couldn’t, by law, overrule a Fed Chairman. From [The Journal]( The group of Trump allies argues that he should be consulted on interest-rate decisions, and the draft document recommends subjecting Fed regulations to White House review and more forcefully using the Treasury Department as a check on the central bank. The group also contends that Trump, if he returns to the White House, would have the authority to oust Jerome Powell as Fed chair before his four-year term ends in 2026, the people familiar with the matter said, though Powell would likely remain on the Fed’s board of governors. It couldn’t be determined whether Trump is aware of or signed off on the effort, but some people close to the discussions believe the work has received the blessing of the former president. I’m not comfortable with this at all. Trump didn’t Build The Wall. He probably won’t. Trump didn’t sort this out in his first term. Biden made the situation far worse. Now, over seven million migrants have been encountered at the southern border during Biden’s administration. A paltry $5 billion would have done the job. Instead, the USG just sent $95 billion to Ukraine, Israel, and Taiwan. Ironically, Israel has a lovely wall on its southern border. Trump’s China tariffs will increase inflation. If China has been [passing fentanyl into the United States]( killing Americans, it’s unforgivable and should be met with the fullest force of the law, diplomacy, and self-defense. And if the tariffs are about that, fine. But really, this is a “we’re the hegemon, and you can’t have the crown” move. And while this seems like a normal play, it only hurts Americans. Just like those stupid sanctions against Russia. Wrap Up This November’s race may be closer than any of us realize. I still think Trump will win, but he needs to do so by the largest margin possible in case of any voting impropriety. Still, he’s got a few issues he needs to clean up. I’d love to see some humility from him so he can do it. Have a great weekend! All the best, Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. 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