Loading ...9 Reasons Why Gold Will Soon Replace Treasuries As The Ultimate Store-Of-Value Asset
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Here is the investment thesis for gold:
Observation #1: The US government can’t repay its debt. Default is inevitable.
Observation #2: It will not be an explicit default.
Observation #3: The debt will continue to grow at an accelerating pace.
Observation #4: Foreigners are not buying as many Treasuries.
Observation #5: The US government cannot allow interest rates to rise much further.
Observation #6: The Federal Reserve is the only big buyer of Treasuries stepping up, which means currency debasement.
Observation #7: The US government will use financial repression to debase the currency in a controlled fashion, though it could spiral into out-of-control inflation.
Observation #8: Treasuries will no longer be the “go-to” store-of-value asset as people look for alternatives.
Observation #9: Gold is the top store-of-value alternative to Treasuries. As demand for Treasuries falls, demand for gold will soar.
In short, we are on the verge of a paradigm shift in international finance as gold replaces Treasuries as the world’s premier store-of-value asset.
The last time the international monetary system experienced a paradigm shift of this magnitude was in 1971.
Then, gold skyrocketed from $35 per ounce to $850 in 1980—a gain of over 2,300% or more than 24x.
I expect the percentage rise in the price of gold to be at least as significant as it was during the last paradigm shift.
That’s because this coming gold bull market could be fundamentally different than other cyclical bull markets. It will be riding the wave of a powerful trend: the re-monetization of gold as the king store-of-value asset. It could lead to the biggest gold bull market ever.
While this megatrend is already well underway, I believe the most significant gains are still ahead.