Not Your Average Gold Bull (w/ George Milling-Stanley) | Expert View

Not Your Average Gold Bull (w/ George Milling-Stanley) | Expert View


A lot of people think that because gold doesn’t
have a coupon or a dividend, it’s an asset without a yield. But if you go back to 1971, since that time,
on a compound annual growth rate basis, gold has returned 7.5%. It’s an uncorrelated asset, not a positive
relationship or a negative relationship. That means that it’s giving you a level of
diversification within the portfolio that few other assets can match. I’m George Milling-Stanley, head of gold strategies
at State Street Global Advisors. If you can, cast your mind back to the summer
of 1972. And if it helps you to picture this, I had
an afro at the time. A lot of things have changed since then. I was a reporter on a magazine in London,
financial magazine, and the editor came to my door, and he said, George, it’s been 12
months since President Nixon closed the gold window. What do you think of that? And I looked up at him and said, I haven’t
the faintest idea what you’re talking about. I don’t know what that means. He said, good, because I don’t understand
it either. I just read it somewhere. But if you and I don’t understand it, that
means our readers don’t understand it, either. Go find out about the gold market, and write
me a story. And here we are, 47 years later, still chasing
the same story. I’ve been involved in gold in a lot of different
ways since then. I spent 10 years with the “Financial Times”
writing about the gold mining industry. Worked for a gold mining company running something
that we called gold market intelligence. Then I moved to this country to trade gold
at Shearson, which gradually became Lehman Brothers. They closed down their physical commodity
operations in the mid 1990s. I went to work for something called the World
Gold Council, which had a promotional organization financed by the gold mining companies. So back to that area, if you like. And most of what I was doing there was advising
central banks on how they managed the whole reserve portfolio, but with particular reference
to the role gold can or should play in the management of reserves. And then after 15 years there, I set up my
own little consultancy and thought I was gradually going to wind down until I was working three
days a week, and then two days a week, and then suddenly, no days a week. But State Street at the time was my biggest
client and they said, we’d like you to come on board, set up a team around the world,
and transfer your knowledge to them, and work yourself out of a job in the next five to
10 years. So that’s four years ago. I checked last week to make sure that the
10 year option is still. On the table. I’m having a ball. I think you really need to look at the whole
portfolio. I think that’s really where you start from. And I’m not suggesting anybody should have
100% of their investments in gold or even 50%. The literature, the reliable literature, the
good quality stuff, suggests that any portfolio could benefit from somewhere between 2% and
10% of the total as the strategic allocation. That’s a pretty broad remit, if you like. Personally, I think that 5% makes a lot of
sense for me, and probably for a lot of other people, too. We did a study. My team, my gold strategy team at State Street,
did a study two or three years ago where we were looking not at a 60-40 portfolio, because
nobody has those anymore. We were looking at a global multi-year asset
portfolio, with some exposure obviously, to stocks and bonds. But also, to real estate, commodities, managed
futures, various other different things. And we plugged in various different levels
of gold into that portfolio. We started with 2%, 5%, and 10%. And what we found was that at the 10% level,
there was the biggest reduction in risk over the whole portfolio and the biggest increase
in returns. So risk adjusted returns were optimal at that
10% allocation to gold. That was the best Sharpe ratio that we found. Now I don’t walk into meetings and say to
people, you’ve got to have 10% across all your portfolios, otherwise you’re doing something
wrong. What I say is, look, if you don’t have any
gold, try 2%, and you will experience empirically, the good things that a small allocation to
gold can do for your portfolio. If you’ve got 2%, try 5%, if you’ve got 5%,
why don’t be brave and try 10%, and see what that actually does for you. So that’s broadly I think, the reasons why
people ought to be interested. How does gold do this? Why does it succeed in reducing risk and increasing
returns? I guess the first thing to say is that a lot
of people think that because gold doesn’t have a coupon or a dividend, it’s an asset
without a yield. I’m sure you’ve heard that before. But if you go back to 1971, which is the beginning
of the free market in gold, and also, coincidentally, the beginning of my experience of the gold
market, since that time on a compound annual growth rate basis, gold has returned 7.5%. That’s actually not too shabby for something
that most people think doesn’t actually have a return. So that’s one thing. Gold does give you an absolute return, or
it has done for the last 50 years or so. Secondly, gold doesn’t really have a strong
relationship with anything else in the portfolio. Not a positive relationship or a negative
relationship. It’s an uncorrelated asset, as the economists
call it. That means that it’s giving you a level of
diversification within the portfolio that few other assets can match. Third, gold is a huge market. It’s very deep in liquid. It’s dominated by the over-the-counter market–
people to people, principle to principle, rather than the futures exchanges, which is
where most financial assets are actually traded on the futures exchange. Gold’s unlike them, completely different from
them. So a very, very deep and liquid market, turning
over, according to the most recent studies, in excess of $100 billion a day. That’s the whole gold market. Now that’s dwarfed by treasuries, but then
everything’s dwarfed by the treasury market. But it isn’t that far behind Japanese government
bonds. It’s comfortably ahead of the UK gilts market,
or the German bond market, or any other government bond market you care to mention. So I think gold kind of earns its place in
the mainstream on liquidity grounds as well. And then finally, the overall impact on the
portfolio, I’ve already mentioned, the Sharpe ratio. I’ve mentioned that gold can help to improve
risk adjusted returns, and that can be demonstrated. Gold also has thousands of years of a track
record. You can’t say that about every asset. You can’t say that about Bitcoin, for example. Gold has thousands of years of a track record
that’s offering some protection against the unexpected, whether your tail risk is macroeconomic
in nature or geopolitical. So its portfolio impact is beneficial. Those I think, are the main reasons why people
ought to be interested if they’re not. I do look at everything through the prism
of gold, but I try to look at everything that’s going on in financial markets and geopolitically
as well, because that can be very important in terms of moving the gold price. A little bit of history to try and give some
perspective to where we are today. If you go back to 2001, the gold price was
at $250 an ounce. It had been there for several years with no
great pressures to the upside or downside. It seemed, given all the circumstances, that
was a pretty good equilibrium level for the gold price back in 2001. But that was about the time that the emerging
markets embarked on this extraordinary period of economic expansion. And with a general sense of profitability,
a general sense of well-being throughout all of the emerging market. Led by China, but throughout all of the emerging
markets as well. And people in the emerging market countries
when they feel prosperous, then they buy gold jewelry. So they were increasing their purchases of
gold jewelry for the next decade from 2001 onward. And the gold price in consequence, is going
up very, very steadily. From 2001, the spring, until the fall of 2010,
gold went up on average, $100 a year. So that by the fall of 2010, we’ve gone from
$250 an ounce to $1,250 an ounce. And it was at that point that the hot money
speculators, the hedge funds, some of the trend following speculators, momentum traders
noticed that gold had gone up $1,000 in just a decade. Felt that it still had some momentum, so they
piled in. They bought gold ETFs, they bought gold futures. They bought gold mining stocks as a proxy
for the gold price. They even in some cases, were buying physical
gold. And they took this market that’s gone up very
steadily based on sound fundamentals for a decade– it’s gone up $100 a year on average. And they drove the price up $500 in just nine
months. Now clearly, in any market, when that price
surge happens, it’s completely divorced from the underlying realities of the asset, gold
in our case. And it’s going to end in tears. You know that any price curve goes vertical
like that, it’s going to end. There were a lot of people had a declared
target of $2,000 an ounce. It’s always kind of interesting to think of
a new big figure in a market. Some people were saying $5,000 an ounce. And I think there were some other people even
suggesting as much as $10,000. I was being very quiet on the subject this
point because I was starting to get worried. The faster we went up and the further we went
up, the more I was starting to get anxious as to when all this was going to end. In fact, gold finished just shy of the $2,000
dollar mark. It topped out at $1,895 an ounce. And that’s when the early adopters of this
speculative run started to take their profits. It took the hot money another year and a half
to make its final exit. I would date that final exit at the spring
of 2013. And lo and behold, I think these were people
who were still hoping for a last surge in the price to get through the $2,000. And there probably people who paid more than
$1,800 to get in desperately looking for some profit out of the thing. But they gave up the ghost. By the spring of 2013, the hot money has gone
to play in other areas of the markets. And lo and behold, gold is back at $1,250
an ounce. So in the almost six years since that point,
we’ve isolated relatively narrowly around that $1,250 an ounce level. So I would suggest that the evidence points
to that being the new equilibrium level. So an equilibrium level five times where we
were at the beginning of this century. That’s actually– again, that’s not bad growth,
if you discount some of the speculative froth that got into the market in 2011. So we’ve been trading between about $1,150
on the bottom, $1,350 at the top. And moving from the bottom to the top and
back to the bottom, and so on. Just basically range trading within that $200
barrier. There have been occasional moves outside of
those parameters, but they weren’t sustained, so I’m going to regard them as outliers, and
ignore them, if you’ll let me. So trading range, $1,150 to $1,350. We examined the downside very thoroughly. Last year, we got down to $1,166. I think that was a very thorough examination
of support, and the support held up very solidly, indeed, in spite of a lot of pressures on
the gold price. So I’m guessing that we’ve already had attempt
this year at the $1,350 resistance area. I’m expecting to have more attempts at that. And at some point, I think that we’re going
to break through, and we’ll break out to the upside. That certainly is the way that the markets
are looking at the moment with gold solidly in the top half of my trading range above
$1,250. We’re currently around about the $1,300 level. I think we examined the downside last year
for two main reasons. The US equity market was incredibly strong
and the dollar was incredibly strong. And those were both putting downward pressure
on the gold price for much of last year. But I think the equity markets were strong
in the aftermath of the Trump tax cuts. And I think that there’s no way that those
are going to be repeated in 2019. So I’m looking for a lot more volatility in
the equity market, with potentially a bias toward the downside. And similarly with the dollar, the dollar
was supported by four successive rate increases last year. And Jerome Powell, head of the FOMC, has made
it clear that the dollar is not going to get the support of multiple rate hikes in 2019. So I’m expecting the dollar to be a lot more
volatile, and potentially to have some downside bias as well. So I think two major headwinds for the gold
price have been removed, which is going to allow the gold price to appreciate, in my
view. And range trading markets do this. They’ll test the downside, they’ll test the
upside. I’m expecting further examination of the upside. And while I say this. I’m looking for modest gains to get into trying
to attack that overhead resistance, but I am acutely conscious of the fact that the
hot money is not involved in gold at this point. In fact, the hot money has only just covered
the short selling that they had been doing for most of last year. And it is always possible the hot money is
going to get interested in gold again. If you think about it, the speculators made
out like bandits in 2011 into ’12, and they’re looking to do the same again at the first
sign that gold is building some momentum of the similar kind to what it did in 2010. Now I’m not going to promise that when the
speculators come back in they’ll drive the price up $500 in nine months again. But that is a real world example of the power
that the speculators can have over the gold market in the short term. The industry is under constant cost pressure. There’s no question about that. If you go back a few years when crude oil
was at $130 a barrel, the industry was under very serious pressure, because energy amounts
for more than half of the total cost of any mining operation, and gold is just the same
as any other mining operation for that. The collapse in energy prices that we’ve experienced
over the last few years has certainly helped the gold mining industry back into profitability,
but we’re starting to see some signs of a resurgence in energy prices again for a whole
bunch of different reasons. And I think that is going to put the industry
under cost pressures again. The average cost of producing an ounce of
gold from gold mines around the world is somewhere between $1,000 and $1,100, which means that
the people at the bottom end of the cost curve, the more efficient producers with the better
deposits, are doing fine. They’re producing for less than $1,000. They have a reasonable profit margin. But this is a global average, so there’s a
lot of people who are above that global average in terms of their costs. There’s not really much of a cushion there. And these are the people that I think are
coming increasingly under pressure. The other thing to say is that the gold mining
industry has figured out that the business they’re in is not producing gold. The business they’re in is producing profits
for their shareholders and for their management. And they are looking very, very carefully
at literally the way their production unfolds and the way it develops to be sure that they’re
not producing a single ounce that doesn’t make a profit. So the bigger and smarter producers are saying,
we’re going to produce less gold, and more profits. That I think, is going to mean that we will
see probably very gradual reductions in mine production. Not falling off a cliff, but gradual reductions
in mine production going forward. So that if the supply is likely to be declining,
let’s look at the demand side. Since all of the dislocations in financial
markets in 2008 and ’09, and the gold market dislocations of 2011 to ’12, We have seen
a resurgence in economic growth in the emerging markets. I know that we get an occasional quarter when
there’s a downturn, but the general trend over the past five or six years or so has
been for China to grow at 5%, 6% or 7%. We’d give our eye teeth to do that. So would Europe, so would Japan. Which is helping to support gold jewelry demand
again throughout the emerging world. Not as strong as it was from 2001 to 2010,
but nevertheless, pretty solid growth every year. And even when we get an economic downturn,
gold jewelry demand has been holding very, very steady in China and India throughout
the emerging world. So that’s good support. But increasingly, we’re seeing investors emerge
in the emerging markets. We’re seeing a significant increase in pure
investment demand alongside the jewelry demand. And that, I think, is a relatively new term
in the equation. That is also, I think, going to be a catalyst
for higher prices going forward. When we look at the rest of the world, we
look at Europe and North America. We’ve got two very distinct kinds of investment
demand going on there. Safe haven buying. People are concerned macroeconomically, people
are concerned geopolitically. I don’t think we need to go into all the details
of that there is a level of uncertainty that some people would suggest is actually unprecedented
in markets right now. So safe haven buying of gold makes a lot of
sense for people who are concerned about the potential for a stock market decline, the
potential for political tensions to increase trade wars, whatever. There’s a lot of problems on the horizon. And outside of this country, you’ve got the
whole issue of Brexit, and Germany coming to terms with the transition from Mrs. Merkel
to whatever comes after Mrs. Merkel, which is proving a little difficult for them to
absorb. So you’ve got this solid safe haven buying,
which I think is providing good support to gold prices. But in addition, again, this is in the period
after all of the dislocations of 2008 and 2012 passed away. The dust settled from them. We’ve seen significant strategic asset allocation
type buying from both institutions and individuals, putting somewhere between 2% and 10% into
their properly balanced global multi asset portfolios, because they know it improves
their Sharpe ratio, it increases their risk adjusted returns. All of that together, you’ve got flat to declining
supply. You’ve got modest but nevertheless, important
growth on the demand side that’s a pretty good recipe, given that the exhaustion instance
variables also, to my mind, seem to be pretty favorable in terms of macroeconomic tensions,
geopolitical tensions. You’re asking me what keeps me awake at night
as far as gold is concerned, and I have to answer that gold is what allows me to sleep
at night. It allows me to push further out on the risk
spectrum and my equities into more growth stocks, and to be a little more aggressive
in terms of higher yield on the bond side, because I know that my portfolio has a pretty
solid core that is going to perform, and is going to perform even better if and when all
those other things turn down. But it’s going to perform whether they turn
down or not. So gold is what allows me to sleep at night. I think something would have to go wrong with
most of the factors that I think lie behind the rise in– what I expect to be the continued
rise in gold prices. Something would have to go wrong with more
than just one of these. You’d have to see a significant surge in the
value of the dollar. And I’m not expecting that anytime soon. I think the Europeans will get their act together. I’m not going to give you a frame on that,
that would be foolish. But I think they will get their act together,
and the euro will reemerge as a decent currency, and as some competition for the dollar. I think, increasingly the renminbi from China
is emerging as– it’s competing in the sense that the IMF has allowed the renminbi into
the special drawing rights. And that’s kind of approval, if you like,
from the IMF for central banks around the world if they choose to include the renminbi
in their official reserves. Which has not really happened very much, but
I think is increasingly going to be happening. So I think we’re moving away from a period
of where the dollar was king and then nothing else really counted in the international monetary
system, to a period where we’re going to have multiple reserve assets, just as we did when
we had sterling, and the dollar, and gold, all three coexisting. When the euro was first launched, the euro
then took its turn and played into a multi-asset international monetary system, if you like. More recently, dollar dominance has as reemerged,
but as I say, I think that we are already seeing the renminbi starting to move. Governments are issuing bonds denominated
in rem. The UK government did that not that long ago. I mean, to me, with my accent, that’s obviously
the ultimate seal of approval. So you’re going to see more of that kind of
thing happening. You’re going to see the renminbi playing more
of a role. You will eventually see the euro play more
of a role. And I think that gold will also play more
of a role, because it is a tradition that when you have a proper multi asset system,
then gold does play more of a role. In the international monetary system and in
the system of foreign exchange reserves in banks, gold is viewed as a currency. One other thing I didn’t mention in terms
of supply and demand was that it’s not just the private sector in the emerging markets
that are big buyers of gold. Emerging markets central banks have been net
buyers now for a decade of the equivalent of about 10% of each year’s demand, which
is very significant. And last year, they upped their purchases
to the largest since that magic date of 1971, the birth of the free market in gold. They bought more gold than at any time since
1971 last year, accounting for about 15% of final demand. And those purchases are continuing this year. So I we’ve got very, very solid support as
far as that’s concerned. India has a problem with government interference
in the gold business. They had kind of left the gold business alone
for a very long period of time once they freed up the market in the 1990s. But they became very worried a few years back
about a significant current account deficit, so they looked at the causes behind outflows
of hard currency. Energy was number one, because India doesn’t
have domestic oil supplies, for example. So energy was the biggest single reason for
hard currency outflows. That’s a necessity you can’t do anything about
that. But gold, they determined, was the second
biggest reason for our currency outflows. And they decided gold was a luxury, so they
put all kinds of onerous taxes, and tariffs, and import duties, and all sorts of things
on it, which didn’t really cut back on gold consumption very much. They just turned it back to the black market. Smuggling picked up again. There were well-established smuggling routes
that had been supplying India up until India opened its markets in the 1990s. It was very, very simple to reopen those routes
again so that the outflows of currency continued. They don’t seem to have the current account
deficit problem that they had before, but governments are notoriously reluctant to give
up on anything that is revenue generating, even if the initial reason for imposing these
taxes and tariffs is gone. So they are gradually unwinding the structure,
but it’s taking a long time. It’s messing with the statistics, it’s messing
with the industry as a whole. Which is part of the reason why China has
overtaken India by far as the largest single consumer. India is still second, so it’s still very
important. But China, because of its own economic progress,
and because of government interference in India, has assumed the number one role. We ignore China at our peril. China is the biggest single producer of gold
from its gold mines, and it’s the biggest single consumer of gold, because it is relative
to even 20 years ago, an extremely prosperous country these days. And the prosperity seems to be spreading from
the ruling classes all the way down through the demographic. And I think that is an amazing development,
lifting people out of poverty. If you look at China’s track record on that,
it has been immense. And you can actually see it if you go and
visit there. There are young people dressed smartly going
into Louis Vuitton and Apple Stores and buying the latest things the way people do in this
country. But they’re also going into the 24 karat gold
jewelry stores, and buying without any apparent– any sense of disconnect at all– they’re buying
the same kind of gold jewelry that their grandparents and great grandparents before them bought
as well. And that, I think, is a very, very interesting
development. The young people continuing to buy the same
kind of gold jewelry. So how should people gain access to the benefits
that this amazing market can bring them? Look, for the longest time, people bought
the stocks of gold mining companies as a proxy for the gold price. But since we launched GLD back in 2004, they
can buy the gold price, because that’s essentially what GLD is. It’s the gold price, but traded on a stock
exchange, so it shows up in your regular statement from your broker, rather than having to go
to a futures account, or having to buy physical gold, and then insure it, and figure out how
and where to store it safely and so on. So GLD basically takes the aches and pains
out of doing that. There will always be people who want to have
their gold in their own possession, and I’m not immune. There’s a visceral appeal to gold that I am
I know, too. I have handfuls of gold coins. But I keep them in the bedside drawer next
to the flashlight and next to the life insurance policies rather than regarding my gold coins
as part of my exposure to gold. That’s through ETFs because they’re a very,
very efficient vehicle to do it. So people don’t need to buy gold mining companies
as a proxy for the gold price. So now people are judging gold mining companies
on the basis of their performance, which I think is a very healthy development to judge
the ones who are doing well compared to the ones who are not who are doing less well. So I think that is a much fairer environment. And as I say, buying physical gold, buying
your own coins or bars, you do have the issue of, how do you store it. Do you need a firearm, do you need a wall
safe, or what do you need. You probably need very good insurance as well. Whereas an ETF just takes away all of the
problems of that. One thing I would say is that in the 47 years
I’ve been involved in the gold business, it has never bored me. That’s partly because I’ve looked at it from
a whole bunch of different perspectives. But the subject in and of itself has been
endlessly fascinating. When I started, I was 25 years old. And basically, at that point, I think I knew
all the answers. Now so many years later, I just hope I’m asking
the right people the right questions. I think that’s really the way that I tend
to look at gold right now. I’m learning an enormous amount every day
simply by talking to financial advisors, and talking to end investors, talking to other
people involved in the business, talking to reporters. It’s a never ending process of learning. And that, I think, is what is keeping my attention. If gold ever loses my attention, I’ll quit,
and retire, and leave it to the next generation to take care of. But for the time being, I love being in the
thick of it. I think probably the most important thing
I’ve said is the four major pillars of the strategic case for gold. One, gold does give you a return. It’s small, but it is nevertheless a return,
and it is perfectly reasonable to have that. Two, that gold doesn’t really correlate with
anything else in a typical portfolio. So it’s diversification, it’s spreading your
risk. Three, it’s a very deep and liquid market. You can transact in size without moving the
price, as many people have discovered. That is in and of itself a very great benefit. And finally, the impact on your portfolio,
helping to mitigate tail risk, helping to mitigate unexpected events. And improving risk adjusted returns. Those, I think, would be the four takeaways. I know people only ever remember three things
that you tell them. So I would hope that people would make an
effort to remember a fourth– to remember all four of those things.

61 Comments

  1. For a man who understands so much about gold, He falls flat on his face by thinking GLD is good to invest in. If you look at custodians and the action of the GLD ETF, you find it is a piggybank for the banksters to raid to short the market. Stay clear of that cesspool. (Harvey Organ follows this in detail)

  2. Unfortunately, people interested in Gold have to watch a lot of crazy videos for price discovery on YouTube. Finally, we're treated to a video which defines SANITY! I so appreciate this video and its contributor. Fabulous interview. Thank you for posting this.

  3. 97 / 100. I'm convinced gold is a good investment! But I wonder, is it in the interest of "State Street Global Advisors" that I buy GLD ETF over physical? Ahh yes, "State Street created the first US ETF and now offers a broad range of cost-effective beta and alpha producing ETFs…" surprise surprise.

  4. Own physical gold/silver — not GLD or other etf's. I'd say more like 10-20% of your portfolio in a bear market and/or epic debt expansion.

  5. GLD is great buy as gold approaches $1266, if it does indeed get a nice lift from the trend line, then swinging a few options of GLD could land you a v nice profit, with limited down side, as jun/july options are about $200

  6. Every gold bug tells you its a hedge against big unforeseen events. But every time we have a major event gold falls with everything else. I wish they would either give some concrete evidence to assure me of said truth, or stop saying it has a historical track record as said hedge. It doesn't seem to be true (at least not in my lifetime).

  7. Good interview. Thanks to Real Vision! The only thing I disagree on is that Gold ETFs (or any paper for that matter) is as good a s gold. Only physical gold is gold when the going gets tough. My 2 cents.

  8. ETF's create so many issues . They have banking rights where it is really their property and not yours. And in reality , the same problem as with futures. THEY DO NOT HAVE IT. Mechanism for con and manipulation. There are so many disclaimers , they do not deliver gold #1 , and tied to bankers and bankers laws where in crisis it is their property. This is a fiat currency shill , unknowingly or not . The law is now that any deposits are owned by the banks , and the ETF's money is theirs. PERIOD!

  9. ETF's at best will settle for yesterdays fiat at best and eliminate future gains because precious metals will be going up so fast , nobody will sell . The ETF's are another banksters way of having hundreds of owners of each ounce of precious metals to suppress. When it explodes , there will be no delivery . Read the laws after last crash . It is the banks money.

  10. Why not mention Basel III as a reason the central banks of the world have been absorbing physical gold? Gold is now considered zero risk to central banks.

  11. Hmmm…reading comments I gather buying paper gold bad but buying paper that represents mining companies good? Is that right?

  12. I enjoyed this video. I would say if 2% was good, 5% was better,and 10% was best, why not try higher percentages? See what happens. I like(not counting real estate diretly owned), 40%Stock fund, 40% Gold, 20% Bond. For the Gold, have half in physical gold coins(American Eagles) and half ETFs. Re-balance when the percentages deviate(buy low/sell high). Have some silver and plenty of supplies too.

  13. 1972 means NOTHING beardo! I have rents paid to me every month= income.
    I have dividend stocks = income
    have bonds= paying me a coupon interest.
    Garbage! PMs are a cap gain and that is all.

  14. Very interesting, my portfolio is 50/50 gold/silver respectively. Over 3 years, gold has performed outstripping inflation. Silver, however has been flat. After selling margins for your buyer, you still cannot recover your original acquisition costs. Curiously, apart from a short spell at 68 – 1 the silver to gold ratio has stuck between a narrow band at 80/85 – 1.
    Originally, I stuck to silver acquisitions using the logic from this disproportionate ratio, but I came to the conclusion that gold at £800+ was also a bargain. If I bought gold now, it should increase my average cost per oz. If the ratio does get significantly squeezed, whatever the price of gold, it won't matter.

  15. very very outdated and obsolete justification and fundamentals.
    Past results do not guarantee future performance as the past 8 years have shown. not giving him a dime to manage.

  16. As long as the manipulation of prices is not addressed here, this guy knows nothing about the future performance. His 50 years of memories are obsolete today. Wake up coma addicts.

  17. I find it interesting that most (not all) of the so-called financial experts never truly see any crash coming. I am also amazed at how often these experts never see a new paradigm shift happening in the market. I remember when the internet was coming of age. I can't tell you how many experts were skeptical about its future potential (experts like W. Buffet.). The same is happening today with Bitcoin and cryptocurrency. I made a boatload of profit in the mid to early 2000s from the rise of the internet. I doubled down when the dot-com bubble burst. I see the same potential for cryptocurrency and blockchain technology. Blockchain will fundamentally alter every aspect of the economy like nothing has since the rise of the internet. I see a greater ROI on blockchain/crypto than anything else in the coming 10 years. I'm in heavy with the blockchain and Bitcoin. I bought Bitcoin when it was just 23 and sold a significant portion of my BTC stash in December of 2018. Made out like a one-arm bandit! Gold will be a losing bet over the coming years. Of course, I could be wrong but I seriously doubt it.

  18. He said he learns [about gold] by talking to financial advisors, news reporters, and mainstream investors??

    Financial advisors and news reporters don’t know anything and are almost laughable. Mainstream investors…. well most of them end up belly flopping in economic downturns. I don’t know, but I don’t like were his knowledge derives from. Especially when speaking favorably about ETFs… I’ll pass.

  19. What happens to the value of gold when asteroid mining kicks off and within a decade more gold will have been mined than that ever extracted on earth before it?

  20. If you are worried about how to store your gold at home, you aren't very creative. Thieves generally are quite stupid.

  21. Gold & Silver I hold ONLY PHYSICAL. There is already too much paper in the markets. LOL 2% to 10%. Tell me how much per cent is held by Central Banks and you better up your investment.

  22. 20:07 USD strength is exactly what's coming. Europe is a basket case with Britain and Italy looking for the exits.

  23. Silver corrected m -80% and Gold just -40% Very Interesting. Is it safe to say Silver is could be a bigger percentage gain? Let's say it could hit $75? That is 5X in Silver versus a potential 2X. in Gold. I have gathered Gold is safer to the down side relative to Silver. I have watched Videos above ground Silver is RARER than Gold. We have far less Silver today than we had 50 years ago relative to Gold… Ever heard of that?

  24. No one asked him if gold is manipulated as it was proved in the European Courts a year ago !! He actually trusts ETF 's and the GLD index and that l found surprising !!

  25. One of the greatest MYTHS of modern finance is that debt is valued as an ASSET. The world has taken on so much debt that it cannot be repaid in real terms. it must be inflated away or defaulted on,. The odds favor inflation. Gold wins in the end. Almost all paper will be devalued in terms of gold.

  26. GLD ETF is a scam. Anyone who thinks they own gold because they own GLD has forgotten that it's just another paper asset which has unknown liabilities against it. Also, GLD is supposed hold gold but nobody says where they get the money to buy it from. When I buy shares of GLD, I'm not buying from the ETF manager; I'm buying from another investor (gambler). So that money did not go to the GLD ETF people and therefore my purchase did not fund the purchase of more bullion.

    So where does the new money come from to buy more gold? Oh that's right, the GLD ETF people print up more shares. Well if they do that, then how can more gold buying increase the shareholder value? Each time they buy more gold, they DILUTE the existing shareholders. And who knows how much gold they actually buy? And who knows how many swaps they have in place? And who knows how many derivatives they have set up in order to make more money for themselves faster?

    GLD is just a dumb shit idea for people. I laugh when I hear people say that gold is difficult to store and that you have to pay an annual insurance premium on it, etc. Do they insure their GLD holdings???? Of course not! Do they insure cash they might have at home? Nope. Do they even insure the cash in the local bank? Nope. So why is there is special requirement for gold? I can have several hundred thousand dollars in a small box of gold bullion coins. I can hide that so easily. I can hide it in 10 places so that nobody will ever get them all. And by the way, insurance companies go bankrupt or did we forget about AIG? No, you don't need insurance, you just need to use your head. But everyone wants to make the ownership of physical gold sound sooooo difficult and expensive. IT'S NOT. And if you don't have the physical I guaran-damn-Tee you that you will never see it again in a crisis. GLD will liquidate and give you fake dollars at a time when gold metal is skyrocketing.

    Why are people so stupid? It's happened over and over and over again yet people never seem to learn.

  27. My issue is you talk like an investment confuser. The ETF gold just like your whole portfolio is not guaranteed to even return the principal. You may have legal claims but when they shut the doors you do not get in. Physical is next to your bed. Even that can be confiscated by government and war. Gold has the value of a fine man's suit, which relates to wool, leather labor for design and construction. People will manipulate it up or down and it goes up by the inflation of the money supply. If gold buys a half suit it is too high. If you can exchange gold for two fine suits then buy it. Gold is not consumed like oil and supposedly is not being made like wood is but is trying to be replaced. We have more gold stockpiled than we need and fiat for commerce is a much better idea if we are honest enough.

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