The “Fear” Trade – Gold & Silver

Unless you live in a cocoon you must be feeling this world is heading in the wrong direction.  History shows our world goes in cycles of social upheaval and consolidation, and it is an unfortunate fact that it feels we may be entering a bad phase.  There is no one cause or catalyst, but creating inequality through monetary stimulus is certainly one.  Vern Gowdie, with the help of a quote, puts it well:

“When you cheapen money, you cheapen a society’s values and morals. You fix one problem and create 10 others. Easy money favours the lucky few, at the expense of the many. Eventually, the ‘many’ get fed up and revolt. This happens in complex and varied ways.

Mark MacKinnon, writing in The Globe and Mail, sums it up nicely:

Rarely, it seems, has the world spun so rapidly, have events felt so out of control.

The headlines blur into one another, feeding the sense of a world in chaos. The war in Syria bleeds into the refugee crisis. The refugees’ march into Europe boosts politicians on the nationalist right. The truck attack in France is followed by the shooting of police in Louisiana. Then it’s a man with an axe on a train in Germany. On Friday, it was a shooting at a mall in Munich. “Brexit” in the United Kingdom is knocked from the top of the news by a putsch attempt in Turkey.

They seem like disconnected events. But what links the British who voted to quit the European Union with the Turks who gathered in a public square on Wednesday to cheer the imposition of a state of emergency is their anger at how the system has worked until now.

As I mentioned earlier, the world is becoming darker. There is a lot of hate around…and fear and anxiety. The system is no longer working for the majority.”

No one wishes for the world to deteriorate as this suggests it might, but you can be prepared.  It is a simple fact that gold thrives in such an environment.  Common sense says this is especially the case when one of the very catalysts is what central banks call “unconventional monetary policy” – i.e. easy money via zero to negative interest rates and enormous amounts of ‘printed’ new money – all accumulating more debt.

The elephant in the room now is of course Trump.  Like the Brexit vote, our new Senate and countless other and expanding examples around the world, the disenfranchised are taking one of their only opportunities to protest, via the polls.  This is not just a Trump thing either, there are elections fast approaching in Europe that are seeing massive swings in early polling to the far right.  Brexit was merely a warning shot.  Just last week Bill Beament, CEO of one of Australia’s fastest growing gold miners, Northern Star, had this to say:

"Obviously the next big catalyst is who wins the presidential election in America and that has got more of an impact on the gold price than what Brexit will have so it will be interesting," he said.

"We all know if someone gets in it will be quite positive for gold."

Whilst we may be accused of fearmongering, we are simply stating facts that are all too often missing from mainstream media.  More importantly it’s about educating people that there is an investment that history shows stands tall amid such chaos.  Gold and silver.