Recession, depression, or recovery, gold is poised to continue its run.
The case for gold is a simple one. But as gold sets new all-time highs, a minority of investors are in it, more are waiting for a dip, and most will miss out on the bull run altogether. Well, until the top when everyone will be herding into it.
But today we’ll look at why the gold boom how historical evidence shows the “weight” behind this gold bull will keep pushing prices higher.
The Long Boom in Gold
All the fundamentals are in place in place for the gold bull run to continue well into the future.
The U.S. budget deficit is likely to be much worse than predicted.
In Too Much Hope and Audacity, we found the government’s deficit forecasts to be a bit too optimistic. Although they called for a cumulative $9.7 trillion budget deficit over the decade, further analysis revealed it was a “best case” scenario. The official forecast included expiration of the Bush tax cuts, no recession in the next 10 years, and a greatest hiring boom in the past fifty years. As a result, the 10 year deficit is likely to exceed the $9.7 trillion estimate.
Also, deflation has the Fed very concerned. The Fed is, at a minimum, going to keep rates at or near zero for a long time to come. That means real interest rates will likely be negative, which are going to keep gold prices on the rise.
Finally, there’s a much bigger driver for gold: gold is still an outside-the-mainstream investment class.
Great Things Come to Those Who “Weight”