Friday, June 2, 2017


Gold. It has allure.  It is shiny. However, the future of gold hardly looks shiny. Also, it is a stupid speculation play to be long gold.

Back on Wednesday, July 9, 2014, the True Dollar Journal published IS THERE EVER REASON TO BUY GOLD?. In that work, I wrote to you:

Buying gold is speculating long on price. It's not investing. Investing means buying an income stream. Speculating means betting on price changes. 
Anyone who tells you that you can invest in gold either is clueless or is lying. Never is there an income stream from gold. 
Since going long gold is speculating, what counts is how much stuff you can buy when you sell gold should you own any. What you want to know is how many gallons of gasoline can you buy in future or how many airline tickets or how many back massages and  so on.
As well, I wrote: 

Likely, no one is going to see another gold run as we have seen for another 25 years. The big run up in gold mostly came with the big credit expansion and bubble. Gold then went higher when uncertainty grew.  
No one on earth is going to see another big run in gold like the run between 2001 and 2011 unless another credit expansion happens at an alike rate of 7.1% a year. Normal true credit growth from low to high runs at 2.5% a year.

It is likely the gold play of 2002 to 2011 was one of two chances in a lifetime to profit substantially from gold. From when Nixon slammed shut the gold window, gold hit its all-time peak of $476.69 in True Dollars™ on January 18, 1980. From there, gold fell, first violently and  then slowly until hitting its all-time low of $50.03 on January 4, 2002. Gold fell a whopping 89.5% from its peak to its trough!

As you can see, since December 2012, the S&P 500 has taken off against gold. Had you owned gold in May of 2016 and sold it to buy the S&P 500, you would have gained 13.3%.

The economy is set to break out to the upside. It is likely the Greenspan-Bernanke Great Depression has at long last come to an end. It's likely the S&P 500 has years to the upside with oscillations in between.

Unless Janet Yellen or her replacement lose their minds, again, its not likely that we shall see another credit bubble like the Greenspan-Bernanke Great Inflation for years, perhaps decades.