Is It Too Late To Invest In Gold?

[Teach]

Is It too Late To Invest In Gold? In my opinion, the answer is “no.” In the name of full disclosure, I own two mining stocks, one is a world-wide “major”; the other is a fledgling “junior.” In my case, the “worm has turned.” My “winter of my discontent” has to into my spring bonanza.

Moreover, I personally believe this is just the beginning, If this were next month’s Boston Marathon, we’ve left Hopkinton and are arriving in towns like Framingham and Natick. There’s still nearly 20 miles ahead of us.

As I continue, you may be asking: "What is my rationale for my sanguine outlook for gold?" As a former history teacher, my motto has been: “The Past is Prologue." The past can often serve as a roadmap to the future. The past economic event that comes to mind, in this case, is The Great Depression. The 1920s was a booming economic period: “The Roaring 20's.” But that decade ended when the stock market crashed in the fall, 1929. No more a "chicken in every pot," two cars in every garage." Buying on margin was in vogue. As little as 10% down. But that would lead to "cover, cover, cover..."

Today, I personally see a similar scenario, not that I'm predicting a Great Depression 2.0. Yet with all money that's been pumped into the system, i.e. Q.E., etc. in recent years and interest rates, until recently, being extremely low, many have taken this as an economic "green light." No, there wasn’t "helicopter money", but darn close. You’d think you were in Ancient Rome: “Increase the dole!”

Furthermore, the events leading up to and including the Great Depression should be a lesson. There is little margin for error. There must be a "finger on the pulse" in this fast-changing economic climate.

That brings me to the Fed. What do they do? Where do they go? They must control the ravages of inflation. Yet in doing so they must be nimble. I believe, metaphorically speaking, Chairman Powell and the Board of Governors are "backed into a corner." There's little "wiggle-room." How many SVB Silicon Valley banks are there out there? Just the slightest miscalculation...

Moreover, you may see this next comment as so many apples and oranges, but I am particularly worried about the human element. Panic withdrawals. Is my bank "the next shoe to drop?" I want my money to be safe. I want to sleep at night. But where do I put it? Established banks with a strong balance sheets. Yet are there other alternatives. Yes. Precious metals, i.e., gold. You may have heard the expression “as good as gold.” In these times, I believe that phrase is most apt.

Finally, I see gold as a store of value. I consider my gold stocks, as my “insurance policy, a just in case. Frankly, I believe we’re at the beginning at one of those “just in case” economic cycles.

In concluding, what you do with your money is your business. As for me, I’m casting my lot with precious metals. When times were good, as they were in the 1920's, people bought just about any kind of stock "Aren’t they all supposed to go up" was the refrain. I recall a story where someone bought shares of Seaboard Air Line thinking it was fledgling airline stock only to find out it was railroad company.

As I sign off, I do believe, in my opinion, that its not too late to invest in gold. In fact, we could be in the early phases of a significant upturn in gold that could easily take us to over 2K an ounce.