from Birch Gold Group:
Despite two volatile weeks, $3,000 gold in 2025 is starting to seem inevitable. Meanwhile, everyday Americans are finally starting to catch on to gold’s role in diversifying their savings. Then we investigate the increasingly popular opinion that leaving the gold standard was the worst decision our nation ever made. Could we go back?
TRUTH LIVES on at https://sgtreport.tv/
Your News to Know rounds up the most important stories about precious metals and the overall economy. This week, we’ll cover:
- At long last, gold is getting some mainstream attention
- The gold standard was better than fiat money for everyone (except the government)…
- …so could the U.S. realistically return to it?
- China discovers a new, “supergiant” gold deposit
Gold’s popularity as an investment
It’s good to see articles like this that fully acknowledge the recent slump in the price of gold provided a great buying opportunity for latecomers. Some prospective buyers have been waiting a year or more, since $2,100/oz. to buy gold. It’s been a long wait. Even then, at $2,600 an ounce, gold was hardly the bargain some were hoping for.
Last week’s $150 gain was certainly notable! The consensus is that a mix of these flare-ups played a primary role in it. U.S.-provided missiles being fired by Ukraine at targets on Russian soil, North Korean troops and equipment deploying to Russia. Or just look at the Middle East: Israeli boots on the ground in Lebanon while 250 Iranian rockets rain down in a single day. Russia’s recruiting Yemeni nationals to sign up for the Ukraine fight, and the Iranians fired up their uranium concentration centrifuges once again.
Goldman Sachs issued a brand-new forecast that mostly reaffirms their $3,000 target next year.
What happens next is anyone’s guess. If gold can gain $150 in a week, we could see $3,000 gold before New Year’s Eve. Some are surely wondering if there are any chances for gold to pull back instead.
The problem with answering that is that, like now, the new “low” prices will still be quite high. Sure, saving $100-$200 an ounce sounds nice. I think that’s a mistake. Penny wise, pound foolish, as my grandfather would say. Like spending 15 minutes in the car to find a station selling gas 11 cents a gallon cheaper – is that really a smart use of your time?
Instead, think about the role gold plays as a diversifying factor in your savings. Notice that I said savings rather than investments. I believe gold is a form of inflation-resistant savings. Most of its price fluctuations are based on currency debasement, after all. When in doubt, we can always watch what the world’s central banks are doing. They’ll never tell you us to buy gold (that means less for them). So watch what they do instead. They’ll continue their paper money printing while assuring us everything is just fine – while buying gold hand over fist. Central bankers haven’t forgotten what real value is…
So far this year, they’ve added 700 tons of gold to their vaults (year-to-date, on track to match 2022’s record purchase level). Overall, the third quarter of 2024saw the greatest gold demand of any third quarter in history.
To hear money managers say that gold has become a necessary part of a portfolio should tell anyone on the sidelines it’s an important asset.
According to an investor survey published by State Street Global Advisors, 38% of U.S. investors currently own gold in their diversified savings. That’s up significantly from 20% just one year ago.
And 56% of gold investors said they’re likely to increase their gold exposure in the year ahead. I wonder if they’re waiting for a chance to buy the dip? Or they’re just sticking to their allocation plan, regardless?
Why was the gold standard really abandoned?
As far as questions go, this is one where the first answer that comes to mind is probably the right one. But what did the Treasury’s insolvency really look like?
Even those with the slightest familiarity will know that President Nixon ended the gold standard so money-printing could pay for the conflict in Vietnam and massive spending at home. But the money-printing had already started, so when allied nations like the UK and France started cashing out their dollar reserves for gold? Effectively, President Nixon faced a massive margin call and he didn’t have the gold reserves to make good on those claims…
Still, this overview asserts that the U.S. didn’t have enough gold. Actually, it says there wasn’t enough gold in the whole world forty years before:
In an article published recently by the Federal Reserve Bank of St. Louis, Maria Hasenstab cites the international gold shortage during the Great Depression. “Countries around the world basically ran out of supply and were forced off the gold standard,” she writes.
Our partner Dr. Ron Paul has heard this excuse before. “That’s like saying you can’t build a skyscraper because your architects don’t have enough rulers to measure it,” he told me.
In other words, it’s nonsense. It’s a BS excuse. That so-called “international gold shortage” was caused by the credit boom of the Roaring Twenties. Banks extended too much credit – and when asset prices fell, and depositors lined up to withdraw their funds (in real money, gold and silver), the banks didn’t have it.
