That’s right — I honestly hope gold prices crash. There’s a chance they might, too — but it’s only a chance, so don’t bet the farm on it.
My reasoning is pretty simple, and is based hugely on an article I wrote about the future of gold and silver prices. It’s also based on a little bit of cynicism and — unfortunately — honesty about the political process in North America and Europe. Let’s look at the reasons:
I Want One More “Cheap Market”.
Say what you want about future gold prices, but gold is pretty expensive right now. It’s more expensive than it’s historical price — much more, even after accounting for inflation. That doesn’t mean that it’s overpriced, necessarily — but it could certainly be a sign.
Either way, if gold prices crashed, that means just one thing — the gold-dollar exchange rate is lower. That means I can trade more of my dollars for more ounces of gold. Remember, the only time the price of gold needs to be expensive is when you’re trying to sell it. In the meantime, you want it to be as cheap as possible.
This means one basic thing: Over time, I get richer. The best time to buy an asset is during it’s down years. People always forget this. They’re so obsessed over making money fast that they don’t want to take the time to invest in an asset that isn’t going to rocket to the moon — at least for a few years.
The best time to buy gold was back in the 90s. The best time to buy stocks was at the bottom of 09.
Let’s Be Honest About Government…
I don’t think the US government is going to get its act together. Not even close. They might chip off a few billion in spending here or there, but the end game is the same — massive spending. More wars. More entitlement programs.
What does this mean for gold prices and the silver rate? It means that any bear market will be a limited bear market — one that will eventually end with a new bull. That’s why, mixed with what I’ve explained above, I’d like to see another bear market for a few years. I plan on buying as much gold and silver as I can afford during that time.
I’ve been working on a report that explains exactly how I construct my portfolio. If you’re an email subscriber, I’ll let you know when it’s finished. If you’re not, sign up for free here.
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