Loading ...Why $4,200 Gold is Still Dirt Cheap
You’d have to be living under a rock not to know that precious metals—gold, silver, platinum, and palladium—have been soaring over the past several years.
Gold is up an impressive $2,600 per ounce, or 160%, since its late 2022 lows, as shown in the chart below, and silver is up by a similar percentage.
In fact, thanks to that strong performance, gold has now even outperformed the stock market, as measured by the S&P 500, over the past 30 years.
That alone should make you pause and realize something huge and anomalous is underway.
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But in light of those strong gains, many skeptics, naysayers, and even some precious metals investors are turning cautious, wondering if gold and silver may have risen too far, too fast, and could be due for a correction.
But my argument, backed by extensive and reliable data, is that the bull market in precious metals is still in its early stages.
Despite recent gains, gold at $4,200 and silver just under $60 are still dirt cheap.
This is because I believe we are only in the beginning phases of a much larger bull market that will take gold to at least $20,000 an ounce and silver to several hundred dollars an ounce within the coming decade.
There are many reasons for this ultra bullish outlook on precious metals, but the main one I will focus on today is that fiat, or paper, currencies like the U.S. dollar, euro, British pound, and Japanese yen are on track to meet the same fate as all fiat currencies throughout history: total collapse.
This collapse will lead to hyperinflation, just as it did with Germany’s ill-fated paper mark currency between 1918 and 1923, as I will show in the next series of charts below.
The first chart shows the early stages of the collapse of Germany’s paper mark, when the price of gold in marks soared tenfold, or 900%, in just two years from 1918 to 1919. That is far greater than gold’s comparatively modest 160% rise over the past three years.
And you can bet that in 1919, after that powerful surge, many Germans believed gold was too expensive, due for a sharp correction, and that it was too late to invest. But as we’ll soon see, they were in for a rude awakening.
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What’s remarkable is that the price of gold in Germany’s dying paper mark currency didn’t stop at a tenfold increase.
By 1922, it had soared another tenfold, resulting in a staggering 100-fold increase, or 9,900%, in just four years.
And sure enough, after such an incredible performance, many Germans believed that gold’s bull market had run its course, that a huge crash was inevitable, and that it was too late to invest. But once again, the skeptics were proven wrong, as we’ll see in the next chart.
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Finally, the chart below shows the full span of Germany’s hyperinflation period from 1918 to 1923.
Even after gold had already surged 100-fold by 1922, it soared another 10 billion times over the following year as Germany’s paper mark experienced its final collapse.
In total, the price of gold in German paper marks surged an incomprehensible 80,645,161,290,223% in just six years.
Those who remained skeptical after gold rose just tenfold—and later 100-fold—were left dumbfounded and in a very precarious position.
Sadly, those who failed to protect their hard-earned wealth with precious metals saw their life savings utterly wiped out, were plunged into poverty, and some even starved to death.
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The reason gold rose so dramatically when priced in Germany’s national currency, the paper mark, was simple: the currency was dying.
That’s how all fiat currencies end, and unfortunately, the U.S. dollar, British pound, and euro won’t be any different. It’s only a matter of time.
This famous historic photograph from Germany’s hyperinflation era shows just how worthless the paper mark had become. It was more economical to burn it in the fireplace than to use it to buy firewood or coal:
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And if the story of Germany’s hyperinflation feels distant or hard to relate to, remember that it happened to real people, just like you and me.
In fact, my maternal great-grandparents lived through it, along with my grandfather Bruno, who is shown in the photo below and was born in 1922 during the height of the crisis.
That experience is what led them, like so many others, to emigrate to the United States in search of a better life.
In fact, if it hadn’t been for Germany’s hyperinflation, I quite literally wouldn’t be alive today. This story is deeply personal to me.
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Germany’s hyperinflation and the resulting economic collapse impoverished and demoralized ordinary people.
In that climate of despair and desperation, Adolf Hitler rose to power by promising to rebuild the economy and restore order, including putting food back on people’s plates after all they had endured.
Unfortunately, after severe economic trauma, tyrannical political leaders, whether from the far right or far left, typically rise to power and oppress innocent, desperate people.
This is one of the outcomes I have been trying to prevent over the past 20 years through my activism and efforts to warn others.
But governments and central banks are pressing forward, bingeing on debt and printing massive amounts of money, rapidly devaluing the world’s paper currencies and driving inflation to dangerous levels.
And if you think Germany’s hyperinflation was a one-off event that could never happen in wealthy, developed countries like the United States, Canada, the United Kingdom, or Australia, think again.
The sheer explosion of global debt makes a worldwide fiat currency crisis a guarantee.
Over the past three decades, global debt has increased tenfold, rising from just $25 trillion to $250 trillion today.
This trend is not slowing down. In fact, it is accelerating and will go practically vertical over the next decade as we approach the endgame of the current global monetary regime.
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As I explained earlier, the key condition for a hyperinflationary event, such as what happened in Germany, is an explosion of the money supply.
Whether through traditional money printing or today’s stealthy digital money “printing,” the result is the same: the currency rapidly loses value.
And this process is already well underway in the United States. Since the year 2000, the U.S. money supply has surged by nearly 5x.
This is why the middle class is being crushed, as the cost of normal life becomes too expensive and increasingly out of reach for all but the wealthy.
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And it’s not just happening in the United States, but worldwide, as the global money supply has exploded by 205% since 2007.
Like global debt, this will go nearly vertical in the next decade as we approach the fiat money endgame.
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As we’ve learned today, when paper currencies die, the price of both gold and silver soars when measured in those collapsing currencies.
That is exactly what happened in Germany during the 1920s, and we are now witnessing the very early stages of that same process.
If we use the German model as a reference, we are likely in the equivalent of 1915, before things really began to escalate.
This is why gold has already surged 160% over the past three years to $4,200 an ounce, and it’s just getting started.
But no, gold is not too expensive at these levels, just as it wasn’t too expensive in 1919 after rising tenfold in German paper marks, in 1922 after rising one hundredfold, or even after rising one thousandfold, because it would eventually rise nearly one trillionfold from start to finish.
If there is one lesson to take from my great-grandparents’ generation of Germans, it is that everyone should own some gold and silver to protect their hard-earned wealth from what always happens to paper currencies—their brutal demise.
I hope you found this report eye-opening and informative. It’s a free sample of the kind of content I regularly share with thousands of premium subscribers to my best-selling newsletter, The Bubble Bubble Report, which normally costs $25 a month
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