murphy metal monday

You don’t play the puck where it is. You play where it is going to be.
–Wayne Gretzky, greatest hockey player of all time
Hyperinflation is a currency event. Not a demand driven event. Hyperinflation results from currencies being debased. This is what will revalue gold. Against gold – stocks, bonds and real estate will fall dramatically. There won’t be enough gold for the demand that’s coming, except for at prices which will be multiples of current prices.
–Egon von Greyerz of Matterhorn Asset Management

Both Matthew Piepenburg and Egon von Greyerz, of Matterhorn Asset Management, adamantly agree that gold is headed sharply higher. Of course, it should be no wonder, as supply/inventory at the wholesale and retail levels is very low. Plus, gold continues to be mined annually at a deficit rate. And, all three major mints: US, Canadian and Australian, are indicating insufficient supplies and the short-term likelihood of curtailing sales to the public. Demand wise, China and India are back to their aggressive ways and Central Banks as a whole cannot get enough – all taking advantage of the artificially low “paper” prices engineered by JP Morgan and fellow bullion banks. And because gold has been drifting lower for eight months now, the public has mostly lost interest. So much so, that the current bearish sentiment is going to be one of the main contributors to the long-term bottom being put into place.

Anyone following the guidance of Matterhorn Asset Management over the last few decades has done extraordinarily well. And, thanks to, we now have access to more of their rational insights:

“Matthew Piepenburg looks bluntly at the increasingly incontrovertible direction of rising inflation in concert with relatively lower yields, paving the way for longer term scenarios in which inflation rates outpace nominal yields—the ideal setting for precious metal strength.

On the inflation side, Matt reminds of the objective tailwinds for more inflation down the road, namely: 1) bogus CPI inflation reporting, 2) unlimited QE, 3) rapidly rising money growth from fiscal deficit spending, 4) a super cycle in commodity-driven price hikes and 5) the now confessed objective of the central banks themselves to inflate their way out of historically unprecedented debt levels.”[1]

Egon von Greyerz is well aware of current market investor psychology. “Instant gratification is what drives the world and especially investment markets. I often hear complaints that gold is a useless investment since it doesn’t go up fast enough. That Bitcoin and Tesla are much more exciting, so why should an investor hold gold – an incredibly dull and unexciting investment for the majority of people. If I tell investors that it is absolutely critical to hold gold for wealth preservation purposes, as the world financial system is the biggest bubble in history, most will ignore me. But if I proclaim that gold in 2021 could reach $3,000, some will prick their ears.

Still most people prefer to stay in stocks, totally unaware that the majority of stock investors are going to ride the stock market all the way to the bottom. And this time it won’t be a V bottom like March 23, 2020, but an L bottom lasting at least a decade. Both fundamentally and technically, a stock market crash is guaranteed whether it starts tomorrow or if we first will see a final meltup.

I am not a Cassandra predicting doom and gloom, but just someone who has spent his life analyzing and understanding risk. To buy Tesla at a P/E of over 1,000 and a pie in the sky market cap of $650 billion is as risky as jumping out of the Empire State Building. Remember that an investment can become more overbought than anyone can imagine just like the Nasdaq in 1999-2000. But the subsequent fall is inevitable. Governments and central banks have learned that you can fool all of the people all of the time. And this is simply because greed and the need for instant gratification stop people from looking for the truth.”

As per Egon von Greyerz, the following are reasons why owning physical gold is imperative:

  1. Firstly, physical gold is not bought for instant gains, but as insurance and protection against a rotten financial system and constantly depreciating currencies.
  2. Your best friend when it comes to supporting the value of gold is your central banker. Remember that throughout history he has without fail worked diligently to destroy the currency.
  3. Right now, we are in the midst of the biggest global money printing exercise in history. Gold has not even started to reflect the total annihilation of paper money.
  4. In relation to US money supply, gold is today at the same level as in 1970, when the gold price was $35 or in 2000 when gold was $290. In real times, gold is now as cheap as in 1970 just before it started to climb 24X from $35 to $850! And it is as cheap as it was in 2000 before gold climbed almost 7X from $290 to $1,920!
  5. Like most commodities, gold moves in waves or cycles. It is no use worrying about if gold at times is manipulated by the BIS (Bank of International Settlement), central banks and bullion banks.
  6. But, it is important to understand in order to maintain the “paper” shorting scam, the BIS is issuing gold swaps to the bullion banks so that they with paper gold can make up the major physical short falls. This frenetic juggling of paper gold by the BIS is clearly a desperate attempt to cover up major shortages in the physical market.
  7. Inflation is likely to surge in coming years and so will interest rates. Just like in the 1970s, real inflation will be running ahead of interest rates, creating negative real yields which is very beneficial for gold. As mentioned above, it was in that climate that gold went up 24X.
  8. The correction we have just seen in gold was a natural part of the cyclical move of any commodity. For the last few weeks, I pointed out that gold would go down to the low $1,700s and probably overshoot on the downside as is often the case. Well, that is exactly what happened, and the correction is now over. Still, it is important to understand that an unlikely attempt at around $1,670 again would not change the very bullish picture for gold.
  9. The coming up move in gold will be extremely strong and take everyone by surprise. There will be no reason for a major correction before the $3,000 level. Whether gold will go to my long-standing target of $10,000 we will see in the next 5 years.
  10. The levels above are neither gold forecasts nor meant to be sensational projections for attention seeking. No, they are likely consequences of all the factors that I have outlined above.
  11. Exponential deficit and debt growth combined with galloping money printing will inevitably destroy most paper currencies in coming years.
  12. The major structural shortages of physical gold and a failure of the gold paper markets could make physical gold unavailable at any price.
  13. In the coming bear market for currencies and bull market for precious metals, gold and silver will not just maintain purchasing power but massively outperform and become the “must have” investments.
  14. But above all, do not buy gold and silver just for speculative purposes. Gold and silver are your insurance against the coming end of a monetary era when all currencies and bubble assets will implode.
  15. You can today buy this insurance of gold and silver at a ridiculously low price. Don’t wait. Soon this insurance might not be available at any price ….
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