The 79 Times
There is a time for everything under heaven. A time to sow and a time to reap. A time to hold ‘em… a time to fold ‘em… a time to walk away, and a time to buy gold.
Monday, February 10th, 2025
Bill Bonner, writing from Baltimore, Maryland
Number 79 on the periodic table is remarkably heartless. The poor? Let them get jobs. The homeless? Let them sleep in hollow logs. Body bags in Gaza? That’s their problem.
Gold is indifferent to the sufferings of others. It is as callous as a torturer… as clueless as a Democrat. Does a man want you to refer to him as ‘they?’ Does an Afghani force his wife to wear a full-length cover…head to toe?
And why shouldn’t the Trump Team want to find a better place for Palestinians… or give preference to White South African refugees…even after eliminating the refugee program?
Eh…gold shrugs.
Are you getting richer? Poorer? Are stocks going up? Is Nvidia a ‘buy?’ Is it time to cash out your 401k?
Don’t bother asking gold. It doesn’t know…and it doesn’t care.
And yet…sometimes, gold glitters. This morning, for example. Markets Insider:
Gold hits record high after Trump threatens steel and aluminum tariffs
Commodity prices climbed and related currencies softened against the dollar on Monday after President Donald Trump said he would impose 25% tariffs on all steel and aluminum entering the US.
But that sparkle is not just an overnight thing.
Since January 2000, the Dow (a general measure of US stocks) is up 290%.
Oil has gone up too…from $29 a barrel to $71.
And bonds? They’ve just suffered their worst sell-off in history. The Wall Street Journal:
A Bond Selloff Is Rocking the World.
But gold has shined… from $282 an ounce in 2000, it now trades at nearly $2,900 – a gain of 900%, more than 3 times what you could get from stocks.
CBS News:
The remarkable, record-breaking price surge that gold experienced in 2024 continued this week as the price of the precious metal surged to $2,871.74 per ounce. That's up from the $2,700 mark gold surpassed last October and, overall, is up just under 40% from where it started in January 2024 when the metal was priced at $2,063.73 for the same amount. It's possible, if not likely, that gold could soon surpass the $3,000 price point should certain economic conditions become more pronounced.
Would you have been better off in Nvidia… or Tesla… or Bitcoin? But those are individual investments; you might have gotten lucky… or not. Take Facebook, for example. The stock was trading at $23 when Barron’s thought it was too expensive. ‘Stay away from the stock,’ it counseled its readers. Today, Facebook (now Meta) trades at $717. Who knew? Trying to pick the hot stocks is a losing proposition. There are few winners…and lots of losers.
It’s asset allocation, not stock selection, that makes the most difference for most investors. Being in the right place at the right time is what really matters. And among leading 21st century places — stocks, bonds, gold, commodities — nothing beat gold.
Which is a very odd thing. After all, not only does gold lack sympathy, empathy, and other kinds of pathy…it is also unproductive… and almost completely useless…except…as money.
What a strange thing.. How could an otherwise useless thing, with no pretensions to activity of any kind, beat a corporation, with all its smart people, patents, marketing machinery… innovations and capital -- a sophisticated complex, dynamic organization, intentionally set up to increase wealth?
Our take on it is this: there is progress…and backsliding. There is virtue…and sin, beauty and ugliness. There is profit…and loss. There is life…and death.
There is a time for everything under heaven. A time to sow and a time to reap. A time to hold ‘em…a time to fold ‘em…a time to walk away, and a time to buy gold.
In the autumn of 1999, US stocks had never been more expensive. It was time to get up from the table…time to walk away from equities…and put our wealth back into real money, gold.
We weren’t trying to fructify it. We weren’t looking for capital gains or for dividends. We didn’t want a good return on our money; we just wanted a return OF our money.
That’s what real money is supposed to do. Not go up. Not go down. Just not go away.
Most of the time, there should be better places for your investment money. But now? Is burying your talents in the ground the best you can do?
An important insight from our Law of Conservation of Value (about which more, tomorrow):Prices go up…and down. No kidding.
Gold has outpaced stocks for a quarter of a century. Isn’t it time for it to go down?
More to come.
Regards,
Bill Bonner
Research Note, by Dan Denning
‘Monetizing the asset side of the balance sheet’ is a phrase Treasury Secretary Scott Bessent has used in the past. Why? It’s a way of increasing government revenue without requiring an increase in taxes or borrowing (debt). It’s a kind of ‘magic wand’ to improve the government’s fiscal position. But can it work? And HOW would it work?
Franklin Delano Roosevelt revalued official US gold reserves from $20.67/ounce to $35/ounce in 1934. This was effectively a 59% devaluation in the value of the US dollar (and came after private gold holdings had been confiscated by Executive Order). The statutory price of gold was revalued to $38/ounce in December 1971 and then to $42.22/ounce in February 1973, where it sits today.
Revaluing the gold held by the Treasury to something closer to today’s market price would improve the balance sheet position of the US government by increasing the value of it assets. Increasing the assets held by the government (Greenland, Gulf of America, Canada) and then leasing them out to generate revenue is another theoretical way to improve the government’s balance sheet without raising taxes or debt.
Is the possible revaluation of official US gold behind the recent move? Is Trump serious about adding to the US government balance sheet by annexing Canada and Greenland? What do you think? Leave your comments below.
Annexing Canada would be a terrible decision. Most Canadians live on the coasts. Both extremely woke. If Canadians were able to vote in our elections we would never see the likes of a Donald Trump again.
Besides that, most do not like Americans. Many think they are superior to us.
I live near Vancouver, B.C., and use to go into that city occasionally. There is a completely different attitude towards Americans today than there was in the 70's when I first started going there. There has been a slow decline of welcomeness over the years. The last time I was up there, always with my Washington State license plates, I questioned whether I was going to make it out of there without being in an accident. The hostility was real.
Many are snowbirds in the Phoenix area. For many years I had business there. Canadians have a reputation of being snobbish.
Now, I am certain, having put this out there, that there are many of you who would argue against these facts. But they are just that, facts, based on my own personal experience and from first hand experiences from others I've spoken to. If yours are different, great. I have no doubt that there are many wonderful, down-to-earth Canadians who appreciate America. I still don't want ALL of them having a say in our elections.
"Revaluing the gold held by the Treasury to something closer to today’s market price would improve the balance sheet position of the US government by increasing the value of it assets. Increasing the assets held by the government (Greenland, Gulf of America, Canada) and then leasing them out to generate revenue is another theoretical way to improve the government’s balance sheet without raising taxes or debt."
All good stuff - but how about quit pissing away tax dollars, hold thieves accountable and put 𝗔𝗺𝗲𝗿𝗶𝗰𝗮 𝗙𝗶𝗿𝘀𝘁 as the focus of ALL spending if you want to really "improve the balance sheet" and lives of every American Citizen?