‘Epic’ Gold Market to Follow “Epic Stock Market Bubble”
The comments below are an edited and abridged synopsis of an article by Egon von Greyerz
Most investors are more interested in making money than preserving wealth, which is why they will never exit the stock market. As the Dow has been up 39x in the last 50 years, this has been the right strategy. Since 2009, the Dow is up 5x, so clearly a win-win position… but is it, really? Stocks are in an epic bubble. Most investors ignore this, since greed dominates their emotions. If stocks are up 3,800% since 1971, there should be no reason why it wouldn’t continue… right?
Up for discussion: Stocks or gold; the Dow will lose 97% in real terms; stock investors will be wiped out; and the epic stock market—the end of an era.
We are now seeing an epic stock market bubble that is about to crash in the next few months. It will be the end of at least a 300-year era and maybe a 2000-year cycle.
With the world approaching economic paralysis and physical lockdown, it is difficult to see how this can end well. Instead, what is now in front of us can only end badly.
The current problems started with major pressures in the global financial system, and accelerated money printing ensued.
But the extraordinary money creation that is now taking place, spurred by Covid-19, will be criticized by few.
So what should investors do? First, sell your stocks. Bonds might hold up for a bit longer, but the bond market will have the most spectacular crash in the next couple of years as central banks lose control of credit markets and interest rates.
Buy insurance and wealth preservation, in the form of physical gold and silver, and some mining stocks.
Remember: If you hold any stocks within the financial system, you are exposed to counterparty risk.
Precious metals will not solve all problems as the world economy implodes, but it is better to hold the only money that has survived in history. In virtually every period of crisis in history, gold and silver have been a surety.