Don't Buy Gold

So when should you not own gold? You shouldn't buy gold when the currency is stable. At that point, you stay with your fiat money. But that kind of situation, no inflation, no borrowings, stable currencies, well, when that happens in this era we are in, I think you will also see elephants flying. Is the coming era, starting from here, is going to be the most fantastic period for investment and growing your wealth? Or is it going to be a disastrous period when you lose most of what you have got? Well, I'm pretty certain of the outcome. I have studied markets and risk for most of my life. And I have always, in the first place, looked at protecting wealth, protecting risk, or in corporate life, protecting the downside. It's been easy to invest in the last few years, or in the last, let's say, 50 years, because most markets have just gone up. So therefore, you don't need to be very clever to make money. Now, so my view is that most of the people are going to lose most of their money in the coming years. Why is that? One is because stock markets and bond markets are now incredibly vulnerable. Stocks are at 250% of GDP, an absolute record. And we are going to come back down dramatically from these levels. Bonds are a total bubble with borrowers that will never repay their money. Whether that's corporate borrowers or sovereign borrowers is the same. Most credit today will not be repaid. We are in the biggest credit bubble in the world with global around $370 trillion of debt, because that doesn't include derivatives, including derivatives in the shadow banking system. I think we are looking at somewhere around $2 quadrillion derivatives. And that market will totally implode when financial markets implode. Other bubble markets are the property markets. They are inflated by low interest rates and high borrowings and high leverage. And they will also collapse or come down substantially. I expect measured against gold, for example, property will go down by 75% to 95% in the coming years. So with this pretty pessimistic, but in my view, totally realistic forecast, what should you do? Well, obviously, get rid of your stocks, get rid of your bonds, and get rid of any property that you have leverage on. So as I said, since 1971, when Nixon closed the gold window, gold has gone from $35 an ounce to $4,470 today. That's an increase of 127 times, obviously outperforming most markets. Not only that, of course, but you have actually, if you held gold and physical gold, you preserved your wealth and protected against all kinds of risks that you see. And here we are today at $4,470, which is around 18 times higher than the lows at 250. So at the same time as gold has gone up dramatically, well, since 1971, it's up 127 times. And the Dow, since 71, is up 57 times. But that is, of course, without dividends. So if you include dividends, the Dow's performance will be better. Another, which is unpredictable, but still a very high probability that it will continue for a long time. It might get worse, but it's not going to end quickly. And this is, of course, the two major wars that we have today. One is the US against Russia, using Ukraine as a weapon. That war is not going to end quickly, although Ukraine is suffering dramatically. And the other war is, of course, in the Middle East, where everybody thought that the US would finish the war in a week. And here we are six months later, and the US is actually losing that war. It's not only losing with the effect of the Strait of Hormuz having closed for many months, and 20% of the world's oil supply being cut off. And now, of course, the Houthis have also virtually closed the Strait of Al-Madab, which is the opening to the Red Sea. So this is disastrous for world trade. It's disastrous for global energy. It's a disaster for the global economy. And it will lead to much higher energy prices as the reserves now come to an end and demand continues. And we can easily see oil prices going up to $200, $300 in the next few months or couple of years, if there's not an end to this war, which I don't expect in the short term. Big danger is, of course, that these two wars, Ukraine and Middle East, actually merge into one. Then all the superpowers will be involved, and then all bets are off, of course. We can just hope that it won't turn into a nuclear war. So as I said, this is a very bad time for conventional investors to be born or to start investing. When I say conventional, conventional means conventional assets, which means that they're buying bonds, they're buying stocks, they're buying property, they're buying futures, derivatives, and all kinds of assets that have been in bubble territory for many years. And these are the assets that I expect to go down by 70% to 90% against gold in coming months and years. So what should they buy? What should the investors buy? What is safe today? Well, certainly not stocks, bonds, or property. So what is left? Well, obviously, commodities. We are now entering an inflationary period with very high interest rates, with very high debts. And therefore, we will see inflation going up dramatically. And with interest rates going into the teens, maybe up to 20% or more, inflation will, like it was in the 1970s, which I experienced especially in the UK, the inflation will also be in the high teens, probably more. So you should definitely hold commodities. And you should absolutely hold gold and silver, which are the best two instruments to preserve wealth. But you should only hold gold and silver in the form of physical gold and silver, stored in the safest vaults in the world outside the banking system. This is how we help people in 90 countries in the world with the safest mounted vaults in the world in Switzerland. We also store gold in Singapore and silver, of course. So this is, in my view, we're looking at the chart again. The potential for gold is multiples from here. Now, that doesn't mean that your purchasing power will go up by multiples. It means that the value of the dollar or other currencies will go down massively. So as you have done, if you've been a gold investor in the past 10, 20 years, you have your purchasing power. And I think you will at least do that and probably do a lot better than that. But if you instead hold cash or bonds, stocks, you will lose purchasing power to the extent of, as I said, 70% to 90% against gold. So please, please listen to that advice. It will be the most valuable advice you've had in your investment history, because it's a long-term advice. It's an advice that will stand you in good stead when markets around you are crashing. And you know that over time, especially when the economies are mismanaged, you will do extremely well. So when should you not own gold? Well, you shouldn't own gold when the countries are making surpluses in their budget, when countries don't have any borrowings, or borrowings maybe of 25%, 30% of GDP. Today, most countries are over 100% of GDP. And you shouldn't buy gold when the currency is stable. At that point, you stay with your fiat money. But that kind of situation, no inflation, no borrowings, stable currencies, well, when that happens, in this era we are in, I think you will also see elephants flying. It is as unlikely as that. So please, don't wait for that to happen. It's not going to happen for a long time, whether that's 10 or 20 years, I don't know. But it certainly is not in the next few years. We're going to see a deterioration of the world economy, a deterioration of the currencies, and gold and silver reflecting that. So looking at the gold chart again, how far will gold go? I haven't got any real feeling for that, because for the simple reason that it's not giving a dollar price for gold when the dollar is going down by the day, all we know is that in real terms, you're going to do very well. And as I have shown before, in real terms, gold measured against a cow is between one and a half and one ounce of gold has been the price of a cow for the last 5,000 years. Just imagine that. In gold terms, a cow has cost virtually the same for 5,000 years. And if you measured it in currency terms or in dollar terms, it would have gone up by millions of percent, I'm sure. So buy some gold, buy silver also, because silver will go up even faster than gold, two, three times as fast. And store it in a safe jurisdiction outside the banking system where you have direct access. We help people with that around the world. And if you do that, you will feel very safe and you can sleep at night. And if you don't, you're going to lose most of your money in the coming years. So please listen to this advice. I'm not saying it just because we're in the gold market ourselves. I'm saying it because I want to help people to preserve their wealth and at least have some protection against the very difficult times that we are getting into now. Thank you very much.