Why gold must go higher from here

I have written numerous posts over years about the mega bull run for gold. The latest one is here. In a nutshell, when everyone is competing for debasing their currencies, coupled with the trend of going deeply into the negative interest rates, people have no choice but to go to something that cannot be debased and printed. That will be gold, and also silver!

We are now in really a messy world in finance that negative interest rate policies (NIRP) are not just a fiction but a reality around the globe. Two major financial powers, EU and Japan, have already begun the NIRP. It is still considered unlikely in the US but Yellen has openly said NIRP is not removed from the table for consideration when situation becomes suitable. While no central banks will openly acknowledge, we are likely witnessing the start of a global bank run starting from now.  You may call me crazy to talk about this but just hear the question from the recent CNBC interviewer who asked the superinvestor, Warren Buffett, “Are you talking about a potential run on the banks, essentially?” This question was raised when Buffett discussed the effects of negative interest rate policies (NIRP) around the globe and mentioned that he’d consider removing his company’s funds from the bank if they started charging him to keep it there. Just so you know how much cash Buffett has with his company, $60 billion! If Buffett is considering doing this, you think other major companies with tons of cash hoard will not do the same? Then a domino effect will start to trigger a run on the banks.  Actually some companies are already testing this in action. Munich RE, the European reinsurance company (the world’s second largest managing $231 billion in investments),  began a radical experiment earlier this year….. Bloomberg reports, to avoid negative interest rates, the company has pulled $11 million in cash out of its overnight accounts with the European Central Bank (ECB) so that it won’t pay the ECB’s negative interest rates.  Instead it is storing $11 million in paper money in a vault. It is really shocking news!!

Don’t take it lightly, friends! If a bank run really starts and intensifies, there is no other way to stop it but to restore the gold-backed currency system. If that happens, we are not talking about just $2000-3000 gold price. It will be much much higher than that. Just think about how much paper money has been created from the thin air by the central banks around the world and how little gold the whole world has, given its limited quantity available on the earth. Buying some gold now as an insurance will be a great asset protection for your wealth.


Of course, I'm not talking about the short term fluctuations of gold prices but the very long term trend. In the very near term, gold is vulnerable to a correction, probably a quick but sharp heading down. If that happens, buy gold as much as you can!