It's the Golden Hour

An asset that’s going to let us rest easy. [Logo]( It's the Golden Hour Dear Reader, I'll get right to it… Let's talk about why I NOW own gold bullion in my portfolio and why I think you should want to own some as well! Holding gold bullion makes you feel more financially safe and secure during this uncharted era of collapsing globalization, your peace of mind is just as valuable as the price of gold on any given day. Tobin Smith True Market Insiders That said, owning gold mining stocks is an utterly different game. Now, if you get the geology right and easily strike enough mined gold in your resource, you most definitely can strike it rich… but that happens pretty rarely. What CHANGED my attitude towards recommending an asset allocation of high-grade gold bullion was the MASSIVE global economic and geopolitical transformational changes that have occurred over the last 24 months. The most powerful wealth-building power on earth comes from the disruptive positive and negative inflections of transformational change. Welcome to the Age of Predictably UPredictable Economic + Geopolitical Risk The economic and geopolitical RISK factors present in 2023 are much HIGHER than they were during any time of my financial and investing punditry career. From my first appearance on Financial News Network in 1982 to my appearance on BuyHoldSell vodcast last week with my tech investing hero Dan Ives of Wedbush (click [here]( to watch), the risk factors, or odds of "tail risk", are ever more present. Tail risk is a type of risk that is associated with rare but extreme events. These risks are often characterized by their low probability of occurrence but high potential for loss. They can be challenging to quantify and manage, and can also have a significant negative impact on investment portfolio valuations. Here are some examples of tail risks: A large-scale natural disaster, a significant cyberattack, or a sudden change in government policy, like a communist country invading a European country and conducting a genocidal war. Sure, you say, but what does that have to do with your recommendation to hold part of your wealth in high-grade gold bullion? Good question. Have I turned into a proverbial "gold bug?" No. Gold bugs who write newsletters about getting rich by owning gold bullion have been dead wrong for the 40 years I have been in the Wall Street game. They have been wrong because they have a religious belief in Friedrich Hayek and his School of Austrian Economics, which says that owning gold bullion is a defense against currencies like the US dollar, whose nominal value exceeds the amount of gold the issuing Federal Reserve bank holds in gold bullion aka "fiat currencies." What he firmly believed was that gold was a natural form of money that was not subject to the whims of deficit-spending politicians or money-printing central bankers. He also believed that gold was a more efficient way to store wealth than other assets, such as stocks or bonds. Well, poor Friedrich has been dead wrong for 40 years. Because, as we all know, the trillions of dollars worth of stocks and bonds that trade every weekday around the world are the most liquid financial assets on the planet. This brings me to Bretton Woods and the birth of the gold standard. After the extreme hyperinflation in Germany in the 1930's, the Bretton Woods system was created to be based on the gold standard. The US dollar was pegged to gold at $35 per ounce, and all other currencies agreed to be pegged to the dollar. What happened next? Richard Nixon and deficit spending to support the Vietnam War were what happened. The US dollar was unpegged to the price of an ounce of gold on August 15, 1971, by Tricky Dick. This event was a major turning point in the history of the international monetary system. Why the move? One reason was that unbeknownst to the American public, the US had been running a balance of payments deficit for many years. We were importing more goods and services than we were exporting, and the government was printing more money to pay for the deficit. We ended up with a bout of MONETARY inflation, which made the US dollar less valuable versus other world currencies. Another reason for Nixon's actions that most people were unaware of is this: the US physical gold reserves, (Fort Knox and NYC Fed), were running dangerously low. Why? Well, because of the Bretton Woods agreements, the United States promised to stand behind the dollar-denominated gold. This meant that the US Treasury would exchange dollars for gold at that fixed price of $35 per ounce. But, of course, there was NOT enough gold in the US treasury to cover all of the dollars being redeemed. This led to a crisis of confidence in the US dollar. The fear of a US default pushed its value lower and lower, seemingly every day.   14-Year Fox’s New Veteran and Wall Street Titan [reveals proprietary trading system]( on air for the first time in his 30-year career: [Seize this opportunity now](.   Lost confidence in the US Treasury's ability to pay its debts? Hmmm, sound familiar? As they say, "history does not always repeat itself, but it sure as hell rhymes." Anyway, Nixon effectively ended the link between the US dollar and gold. But that de-linking of gold to the US dollar maintained a period of high inflation because the US government could no longer control the dollar's money supply and value. Net net? The end of the Bretton Woods system (and two oil embargoes from the Middle East in the 70s) led to a period of historically higher prices for goods and services and oil, or hyperinflation, in the United States. Fast forward to the early 1980s. The new Fed Chairman, Paul Volker, was brought in after two previous Fed chairmen would not raise rates enough to choke off 12% inflation. He took a blow torch to the US economy by raising Fed Fund rates to above 18%. But see, back then Volker could AFFORD to take a blow torch to America's GDP because we could afford it! According to the Treasury Department, the total federal debt in January 1982 was $1.081 trillion but the size of the US economy in 1982 was $3.03 trillion. This means that the federal debt was about 35.9% of the size of the US economy in 1982. The picture is much different today! On July 26, 2023: Projected GDP by the end of 2023 is just over $26 trillion. The total federal debt by the end of 2023 is projected to be $33.3 trillion. NOW the case for owning a bit of gold bullion in your portfolio gets a lot more interesting. Why? The US dollar is headed DOWN in value. When the Fed stops raising rates while the Federal debt service inexorably grows higher and higher to 10%+ of the entire Federal budget, the global currency markets are going to find the dollar less and less attractive. Look, fear of debt defaults by the US Government is, for the moment, silly, but only as long as the Treasury Department can print more money for the Federal Reserve to inject into the US economy. But this "No Way Out" condition of the US Economy is THE PERFECT formula for: 1) Lower dollar valuation, which then means 2) Higher valuation of gold, and 3) Higher odds of a "tail risk" event hitting the US economy All of which brings us to the sweltering summer of 2003… We're dealing with: 1) Mass geopolitical and economic chaos of the last 30 months 2) The Age of Deglobalization 3) The western world has the highest percentage of population over the ages of 60 and 70—except for China and Japan who have an even higher number of citizens over 60 years of age. 4) On the flip side, the fertility rates of those in their 20s, 30s, and 40s aged is 34% LOWER than the Baby Boomer generation. US and modern world economies cannot grow at three and a half to four percent per year because there aren't enough people to replace the Boomers and Generation X. 5) The rapidly-rising level of greenhouse gasses creating higher, more extreme climate temperatures around the world (don't let your politics blind you to the radical climate change that DOES INDEED exist). Given all of the above, this is my thinking… With higher odds of "tail risks" in an era of global warming and deglobalization, it now makes sense to keep a bit of your net worth in gold stored somewhere that is trustworthy and insured! Why? 1) Gold is an historically stable asset. It has been used as a form of currency for centuries and has a long history of holding its value. 2) Gold is also what we in the investment advisory world call "a haven asset," meaning that it tends to hold its value or even appreciate in times of economic or political turmoil. 3) Gold is a hedge against the current devaluation of the US dollar vs. other major currencies. History has shown that when the dollar's value decreases, the value of gold tends to increase. 4) Gold also tends to move in the opposite direction of stocks and bonds. So, if stocks and bonds are declining in value, the value of gold is usually rising. This can help to reduce overall portfolio risk. For many folks, owning a tangible asset that goes UP in value as the dollar depreciates in value is just simply reassuring, especially during times of economic tail risk or political uncertainty. More importantly, having a little ballast in your wealth portfolio in times of macroeconomic STRESS can help keep you CALM and sleep at night. I like that idea, don't you? And just to let you know, I have found a source of gold bullion with fantastic security that I am currently doing due diligence on. I'll share with you my idea when I'm done with the research! Until then, I'll see you next week!   [On Fire But Going Higher]( [What Baseball and Boxing Tell Us About the Market]( [How to Super-Size Your Gains from the Bull Market Leaders]( [YouTube]( [Facebook]( [Twitter]( [Instagram]( [LinkedIn]( DISCLAIMER ©2023 by True Market Insiders, LLC, Protected by copyright laws of the United States and international treaties. 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