Today, once again, the DJIA struggled to pass the 20,000 milestone, but failed. I’ve been saying for more than a year and a half, that the DJIA will see 10,000 before it sees 20,000. I might very well have to eat my words, but I’ve said that because I’ve hoped that investors would step out of the ether cloud long enough to see the immediate necessity of an orderly and disciplined correction. I’ve said that because there is no legitimate reason for the market to be where it is, for reasons that I’ve detailed over the past year and a half. Moreover, I’ve said that in the hopes that the market would fall short and correct in varying stages, over a period of time, rather than the utter collapse it is now set up to endure.
A reader of my blog told me that under the new Trump Administration, the DJIA has clear sailing to 25,000. I told him that I hope he’s right. I asked him how much physical precious metal he owns. He proceeded to tell me that he’s got 10% of his portfolio split between GLD and SLV, then another 5% spread over several mining ETF’s, “just the 15% in precious metals his financial advisor had recommended for normal times.” At that moment, I realized why the typical American investor is not clamoring for ownership of physical precious metals. They mistakenly see precious metals like any other investment, a financial tool with the ability to appreciate and depreciate, leaving timing as the only critical consideration.
To anyone who feels the same way, let me simply say that with a $20 trillion national debt looming, increasing inflation, increasing interest rates, pending global economic chaos, and a new U.S. Administration taking over, that has the entire world on edge, you can rest assured that there is nothing “normal” about our current economic condition. An even more important realization for the reader’s opinion just discussed is the fact that 100% of the portfolio described is in “paper” assets. If the market collapses, the dollar is replaced by an IMF “One World” currency, the dollar becomes devalued, or any other such calamity befalls us, paper assets will go the way of the Weimar Republic and become utterly worthless.
Simply put, gold and other precious metals increase in value during economic calamity and are universally accepted. Precious metals may be an investment, but unlike any other “investment,” they’re the world’s best insurance policy against economic calamity. And with regard to GLD (and ETF’s in general), as Forbes reported in November of 2011, “Regular shareholders have no rights of redemption and the gold is not required to be insured by the Trust, which is not liable for loss, damage, theft, nor fraud.” Selling high and buying low has never been so easy. Today’s market is peaking and over-inflated. Critical metals are just above a ten-month low. Do the math!