As the world gets closer to major economic disruptions as it hits the ENERGY CLIFF, smart investors continue to buy physical gold bullion when supplies are still readily available. However, this won’t always be the case when more investors realize the energy shortages and massive price spikes will destabilize the financial markets and paper assets.
As I sit here and watch this ENERGY CLIFF unfold, 99.9% of the world has no idea of the gravity of the situation. Thus, even though the U.S. Mint Gold Eagle sales continue to soar higher, this is demand from just a fraction of investors. This is very similar to what I said in my interviews, Europe was treating natural gas last year as if it was going to be CHEAP & ABUNDANT forever. Now, Europe is facing natural gas shortages and price spikes, not seen in decades.
So, what the hell happens when the ENERGY CLIFF begins to destroy the very U.S. Dollar and currencies used for the trade of goods and services? Let me tell you, that is not so far-fetched when we realize the U.S. Dollar is nothing more than a fiat currency back by Energy and a massive amount of debt. Thus, when both Energy & Debt get into serious trouble… try telling the grocer that your money is tied up in your now worthless 401K and see how much Meat & Potatoes they will give you.
Folks… this is serious. While the world isn’t falling into HELL & A HANDBASKET currently, as time goes by, it just gets worse. Unfortunately, very few Americans and investors worldwide have much in the way of GOLD & SILVER INSURANCE. Rather, they continue to be in STOCKS, MORE STOCKS, EVEN MORE STOCKS, BONDS, and CASH. Those are not real stores of wealth or money. Regrettably, more and more Americans are going to find that out the hard way.
With the most recent update by the U.S. Mint, another 23,500 Gold Eagle oz were sold since the last reporting figures were released. As of October 18th, a total of 119,500 Gold Eagle oz have been sold compared to only 75,000 oz last month. That’s a stunning 60% more sold already in October, and there are still two weeks remaining.
Even though 119,500 oz of Gold Eagles is a pretty BIG NUMBER, if we multiply it by $1,880 (estimate retail price), that is only $224 million. The current value of the total U.S. Stock Market is $48.5 trillion. And then if we add the $46 trillion of in the U.S. Bond Market, we are talking about a lot of PAPER CHEESE.
Can you imagine if this $224 million number doubled to nearly $500 million? That would double the Gold Eagles to almost 250,000 oz… in a bit more than TWO WEEKS?? There is no way the U.S. Mint could keep up with selling 500,000 oz of Gold Eagles a month when the most it has sold in a year was 2 million in 1999 due to Y2K. If the U.S. Mint sold 500,000 oz per month, that would be 6 million a year. The U.S. Mint just doesn’t have the ability to increase production that much.
So… as the world is sitting on the RAZOR’S EDGE waiting for the next shoe to drop with its EGGS all in the STOCK-BOND-REAL ESTATE BASKET, smart investors continue to buy physical gold and silver.
With this large surge in Gold Eagles sales this month, it has pushed the total to 1,042,000 oz, the highest since 2009, when the U.S. Mint sold 1,435,000 oz. I’d imagine Gold Eagle sales will likely reach 1.15-1.2 million for 2021, and the market isn’t really concerned about all that much. What happens when the FAN really hits the SHYTE in the next few years?
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Steve, OT & FYI: “It sounds from the title that his view is pretty much my view.” Gail Tverberg on your Palisades Interview
Yep, for me too: Different approaches, same (similar) conclusions.
Seems the time to “panic” may be close at hand. Time to convert some of our fiat currency savings into gold and silver now/soon, before gold and silver transform into unaffordium and unobtainium?
Imagine 48 trillion of stock market money in sheer panic either looking for an inflation hedge or responding to a crash in nominal terms. There’s just not that many places for it to go. I think productive farmland would certainly be a great investment. Bonds and Bitcoin? I guess so in the short term. One could even imagine a piddly 100 billion going into the silver market. The Fed creates more than that in a month, not to mention all the other central banks out there.
“Piddly 100 billion.” Good word – piddly. I don’t think I’ve ever used that word in my life!
With things changing so fast on a daily basis, most have only a short term trader outlook and don’t seem to be concerned about “the next few years” right now.
They want to get rich fast, and their stocks to go up for the rest of their lives.
“100 billion going into the silver market”?
Not into physical Ag.
Maybe ETF’s can handle that largess.