Due to the immediateness of what this country is facing with respect to hyperbolic inflation, bonds and banks so leveraged, fiat currency is already a fugazi.
Although both ETF’s and physical bullion are safe, well respected investments in a sector that has potentially unlimited and unprecedented upside, the physical gold offers you much more protection and guaranteed value.
China’s infrastructure push is something every investor, and particularly every investor interested in gold, should care about a lot. Why? Because infrastructure creation on the scale that lies ahead will consume massive amounts of commodities.
The past two decades have seen strong gains in commodities, including gold. In that time, gold and copper gained well above 400%, compared with 140% for stocks (as measured by the S&P 500, with dividends reinvested) and bonds. This strength in commodities reflected scarcities as growth in the developing world, led by China, took off.
Sometime in 2021 the world will likely be in a synchronous economic upturn. The market, as is its nature, isn’t waiting to see the recovery. Markets are forward looking and they anticipate events. Hence the recent gains in stocks and the outlook for more gains ahead.
Counter-intuitive trends are unfolding in the world’s economy. Despite economic news that is likely the most dire in our lifetimes, commodity prices are staging a spectacular rally.
Renewable energies represent an increasingly important investment theme. Many of the biggest market winners these days are directly leveraged to renewables.
Over the past 20 years, gold has been the top-performing asset, far outstripping stocks and bonds. Looking just at this past year, gold has continued to handily outperform the S&P 500. And most pertinent of all is that you can expect gold to be the biggest winner over the next 20 years.
"Sustainability is the only path to conquering two looming existential threats: climate change and commodity scarcities. Whether you focus on one or the other or both, they are at the heart of why sustainability is essential for the world to prosper."
In the end, the pandemic will likely accelerate the timeline for commodity scarcities. At the same time, it has strengthened China’s relative position and its ability to achieve its goals, including a gold-backed monetary system, with the West less able to push back.
You might ask why the rising trajectory of commodities this century has largely escaped notice. The likeliest answer is that prices for mining company shares as well as the underlying minerals tend to be very volatile. The volatility in commodity stocks makes it feel like the commodities themselves are doing more poorly than they actually are.