The Strange Case For Gold

QUESTION:

Hey Martin,

Years ago, I thought I was so smart.  Silver was 5 and gold was 300.  I was pretty young and did not have a lot of money. I purchased 30k worth of silver coins and some gold coins.  My thought process was that silver, most likely is not worth 0. As both metals were rising every year, I felt it was because the fed was trapped.  We can never have high rates or real rates because the debt load was too high and once you commit to constantly easing and needing inflation you can never go back. I never thought QE and all that monetization would have taken place like it has.  However all that fed action made me even more bullish on the precious metals.  Not because of inflation, I never really understood why we would have a hyper inflation simply because the govt was not handing out money to people. I knew damn well I was not getting a check.

After the last couple years of reading you I realized I was just lucky for that time period however I am looking forward to September and the way Socrates sees what is going to happen to gold and silver. As I read you, and try to get in your head I feel like you try to explain what Socrates may be seeing in real time. (AM I correct?)  However, you let your Socrates Code do the timing for shifting money around.  I need to ask, if Socrates sees an ultimate 5000 target on Gold what or how do you explain that?

Is it just that people realize they rather own a an ounce of gold rather then a similar amount in cash- in other words I always ask myself especially again now at these prices. Would I rather have 1200 US dollars in my hand or an ounce of gold and my answer is the gold.  I have flipped plenty of ounces of silver from bars to cash in the 30s and 40s that I sort of enjoy that trip to the coin dealer.

You constantly talk about gold bugs doing a disservice but there are plenty of intelligent investors who are not gold bugs that thought gold had to go higher and have gotten caught long these last few years.  Now many do not even talk about it and the ones that still do believe in gold, well most people just laugh at them.  I know as I am sitting in my office with other traders/investors and they see me constantly looking for values in the precious metal sector they think I am crazy and have lost it. It is the same feeling I got when silver was 5 and gold was 300.  People are looking at me like I can not be serious.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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