Buckle Up, Butter Cup

In August, 1971, the feds introduced their new credit-money dollar. A year later, gold investors had doubled their money.

Source: Getty Images

Tuesday, October 8^th, 2024 

Bill Bonner, writing today from Baltimore, Maryland

“I believe there will be an important announcement in the next couple of weeks.” 

“Announcement of what?” 

“The new BRICS currency. It’s just a matter of time until they get it together. It’s going to compete with the dollar.  And they’re going to have to give it credibility... probably by linking it to gold.” 

Our source manages a private wealth fund.  

“Gold has made a dramatic run-up this year. But it is not what most people think. This is not like the last gold bull market. It’s not driven by individual buyers who are trying to protect themselves from inflation. Those guys aren’t in this market yet. And the mining companies haven’t caught fire... yet.”  

But the press is becoming giddy: 

Barrons: 

Gold Prices Are at Record Highs—and They’re About to Shoot Even Higher 

Forbes: 

The Gold Investing Madness Is Just Getting Started 

Kitco: 

Gold's remarkable performance in 2024 appears poised for further gains 

This year has witnessed an unprecedented surge in gold prices, with the precious metal charting new territory. The bullish trend began in earnest in February when gold prices embarked on a parabolic rise from $2,070 on February 14th. By March 28th, gold futures made history by closing above $2,300 per ounce, and the records continued to fall. On April 5th, gold breached the $2,400 mark, and by May 24th, it achieved a new historical closing price of $2,500.70. 

Gold's remarkable performance in 2024 has challenged market norms, demonstrating its allure as a safe-haven asset and inflation hedge. As economic uncertainties persist, existing geopolitical concerns remain, and monetary policy shifts, gold's bullish sentiment shows no signs of waning, suggesting that the precious metal's record-breaking run may be far from over. 

“There’s no bull market like a gold bull market,” Richard Russell used to say.  

In April, 1970, the price of gold was $36 per ounce. In August, 1971, the feds introduced their new credit-money dollar. A year later, gold investors had doubled their money. Then, they doubled again... and again. By 1980, gold was trading over $670... an increase of 18 times in 10 years. 

More recently, we’ve seen an increase in the gold price from around $1,000 at the end of 2015 to over $2,600 today. An impressive run... but nothing like the bull market of the ‘70s. 

“The driving force [of gold’s bull market], I believe,” continues our source, “comes from central bankers who are anticipating a world of inflation. They’re not dumb. They know that today’s debt levels can’t be supported. They need inflation. And they know that they’re going to cause it themselves.  Their own paper money... pounds, euros, dollars …are going to be less valuable in the future. So, they’re putting gold in their vaults. Your readers should probably do the same. 

“But you never know how it will play out. The only thing I would feel pretty sure about is that inflation will not go away... and the most vulnerable thing now is probably the bond market. I don’t know when it will come, but when you put the puzzle pieces together, you see a picture of collapsing bond prices... and soaring gold prices. 

“But better put on the seat belts. Whatever happens, I wouldn’t expect it to be a smooth ride.”  

Regards, 

Bill Bonner