Jim Rickards has been talking $10,000 gold for a while. This seems like an absurd number, but Rickards insists the dynamic exist to push gold to that level – when the world financial system collapses under its own weight.
Rickards has been making the rounds again lately, saying gold is in the midst of its third bull run and has plenty of room to go.
In my view, we’re in the third bull market of my lifetime. The first one was 1971 to 1980. Gold went up over 2,000%. The second one was 1999 to 2011. Gold went up 655%. We’re in a new bull market that started in December 2015. Gold’s up 27% since then. Gold was up in 2016-2017. First back-to-back year of gold gains since 2011-2012. So, 2018 will be a breakout year … we’re actually in the third year of a bull market with a very long way to run.”
Loose monetary policy has dumped billions of dollars of easy money into the world’s financial systems over the last eight years, pumping up a whole slew of bubbles. We are still on the upside of the business cycle, with stock markets hitting record levels it seems like on a daily basis. But if history serves as any kind of indicator, a crisis is on the horizon.
What will precipitate it? That’s the proverbial $64,000 question.
Jim Rickards has compared financial crises to an avalanche. Snow piles up becoming increasingly unstable. Eventually, it reaches the point when all it takes is one more snowflake to set off an avalanche.
In a recent column, Rickards highlights three potential “snowflakes” that could set off the next deluge.
Over the last year, we’ve talked a lot about geopolitical risk. Could turmoil around the world now be the new normal?
Some analysts think so.
Like gold, silver is money. It’s historically been a good safe-haven investment and a hedge against inflation. But it also serves as an industrial metal. Silver is used in energy production, computers and electronics, and the biomedical industry.
As Peter Schiff pointed out in a video last month, silver is extremely undervalued right now. The current silver to gold ratio stands at 75:1. This means you can buy almost 80 ounces of silver with one ounce of gold. Consider that the historic average ratio is around 16:1.
Bridgewater Associates founder Ray Dalio said investors should buy gold.
Bridgewater manages about $160 billion in assets according to its website, and ranks as the worlds largest hedge fund.
In a LinkedIn post, Dalio wrote, “prospective risks are now rising and do not appear appropriately priced in.” He specifically cited geopolitical tensions, especially the war of words between North Korea and the United states, and the looming deadline for Congress to raise the debt ceiling.
Gold hit two-month highs this week as investors seek safe-haven amidst increasing geopolitical tensions. Pres. Trump promised “fire and fury” if North Korea continues its threatening posture. Meanwhile, relations with Russia continue to deteriorate.
During an interview on RT, Peter Schiff said world tensions and the weak dollar should be playing an even larger role in pushing up the price of gold than they have been. Given the dollar has tanked this year, gold has really not strengthened very much. But Peter went on to say he thinks people will begin to embrace gold – although not for the reasons you might think. He didn’t focus on the current geopolitical brouhaha now in the news cycle, but instead emphasized we should be watching the Federal Reserve and central bank policy.