Investors today have Hobson’s Choice. But they still don’t understand the options open to them. Thomas Hobson had a livery stable of 40 horses in Cambridge in the 16th-17th centuries. But customers only had a choice of one horse. They could either take the one nearest the door or none at all. So Hobson’s choice in simple terms means “take it or leave it”.

Lemmings have a herd mentality. But following the crowd, can have grave consequences like falling off a cliff and drowning in the ocean. Many investors have the same instinct. They follow the crowd and buy or sell when other people do. This probably won’t end in the same disaster as the lemmings, but following the crowd virtually never leads to a successful long term investment performance.

Don’t let your bank hold your gold. They might not find it. A gold investor told us recently that his Swiss bank had moved the client’s gold from the bank’s safe to a private vault in the name of the bank, in Zurich. The client was aware of this move. But then the problems started. The gold was allocated and the client had the bar numbers. The client wanted to store the gold through our company and instructed the bank. But the gold wasn’t there any more. The gold was supposed to be segregated but the bank had stored it in the collective vault. And the client’s allocated, numbered bars were not to be found anywhere.

Finally it happened although it took 6 long years to break through The Gold Maginot Line at $1,350!

This resistance was a lot stronger than the original French one in WW II since it took the Germans less than a year to penetrate it in 1940.

At the beginning of last week, I was challenged with a wager on the gold price. The individual, who called me a “gold pumper”, wanted to bet $1 million on the gold price going below $1,000 before it reached the Maginot Line at $1,350.

Since the gold price was $1,325 when I received the challenge, the odds looked pretty good to me. Gold only needed to go up $25 for me to win $1 million but down $325 for the challenger to cash in. Thus, a no-brainer really, especially since I was totally convinced that gold would break the Maginot Line soon.

The breakout in gold and silver that we have been patiently waiting for is now starting.
The long term up move in the precious metals, which have been pausing since 2011, is now resuming. We can with confidence expect all the short term resistance levels to be broken. The first obstacle was the Gold Maginot Line at $1,350. As I have said for quite some while, this 6 year resistance was always guaranteed to break. It has already been broken in most currencies, so gold in dollars was never going to hold out for much longer. And today it happened in Asia and Europe with gold reaching $1,358.

Will Atlas save the world? Global debt of $250 trillion can neither be serviced nor ever repaid. More likely, it will continue to grow exponentially until the world financial system collapses under the weight of the debt plus unfunded pension and medical liabilities of at least $250 trillion plus derivatives of $1.5 quadrillion, making a total of over $2 quadrillion.

The massive explosion of wealth in the world could be a sign of general prosperity but that is certainly very far from the truth. The printed money and credit expansion has only benefited a very small minority. The gap between the rich and the poor is getting ever wider but it will soon shrink dramatically.

How can a small clique of gold owners holding less than 0.5% of world financial assets be right? They are clearly a minuscule minority of obstinate goldbugs and contrarians who are living in the past. Or do these people see something that the majority of investors don’t?

My long standing target for gold of $10,000 in today’s money and much, much higher in inflationary terms, is now more probable than ever. But I hope it will never be achieved. When gold goes to $10,000, it won’t be under the same circumstances that we saw in the 1970s. Gold then went from $35 in 1971 to $850 in January 1980 – a 24x explosion in very different conditions.

Why do 99.9% of investors not own gold? Due to my interest and activity, I clearly meet a higher percentage than the 0.1% who both understand and own gold. But I also meet a lot of people who have been indoctrinated by their investment advisors and the media about gold’s uselessness. Most of these people don’t understand gold and don’t know the history of gold, nor its role as money.

Gold is the ultimate insurance against a bankrupt financial system, a corrupt political system and a rotten monetary system. But official propaganda, combined with people’s greed, mean that virtually nobody understands the necessity of insuring against these risks. Also, investors are convinced that stocks always go up and therefore that the 147x growth in the Dow since the end of WWII will continue unabated. Few understand that exponential growth in stocks is totally dependent on an equally exponential expansion of money printing and credit, including share buybacks.

Will the average stock portfolio gain 1,900% to make up for the coming 95% fall? This is the unenviable task that investors will be facing in years to come.
Six weeks ago I wrote about Alfred, a 74 year old man who during his life made a $14 million fortune in stocks by always being invested in the Dow. Alfred never analysed the US or the world economy. Nor did he analyse a single stock. Always being in the market was his secret.

MMT is the socialists’ dream. It officially stands for Modern Monetary Theory but a more appropriate name would be More Money Theory. Because MMT is just a fancy name to justify more money printing, more deficits and more debts. Socialists love MMT, because for a sovereign nation, it justifies constantly living above your means.

One of the Fed’s three main objectives is to maintain stable prices. But they have never achieved that at least not since 1971. Again, the Fed did a volte face because they have a total inability to read the economy. The clueless Fed overslept and realised a few years too late that the US economy was overheating. So at the time when the economy was turning down, the Fed started to increase rates and implement QT (quantitative tightening). But now they are panicking and reversing policy again.

The astonishing Fed again proved the consistency of its inconsistency. Since its creation in 1913, and especially after WWII, the Fed has always been behind the curve. It is hard to believe that this is just incompetence. The recent change of policy hardly seems to be part of a plan but rather another reaction to events.

Have the Ides of March been delayed in 2019? Normally the Ides of March just means the date March 15th. Shakespeare made the expression ominous as it was the day that Julius Caesar was murdered. Today in 2019, the 29th of March seems more significant than the 15th. Because on the 29th, we first have the conclusion of Brexit. Or maybe we don’t! Brexit has been a tortuous process that after 3 years has got nowhere. All it has done is to reveal the EU elite’s megalomania as well as their intransigence. It has also revealed the complete incompetence of the UK government as well as Mrs May’s total indecisiveness and her inability to distinguish between activity and achievement.

The world financial system has been in a euphoric state since 2009. It seems that the Keynesians, like Krugman or the Modern Money Theorists (MMT) are right after all. All asset markets are near the highs and show little sign of changing direction. As Treasury Secretary Mellon said in September 1929: “There is no cause to worry. The high tide of prosperity will continue.” All that is required is more of the same medicine, more credit, more money printing to make a virtuous circle of eternal prosperity.

Imagine a casino full of slot machines that all guarantee a constant high return. All you need to do is to put in a bit of money and you will get an incredible income stream for life.
Well, this is exactly what the stock market is, namely a remarkable slot machine with a continuous flow of guaranteed payouts. No skill is required, and relatively little money. And the wonderful thing is that you don’t even need to be lucky since the machine just continues to spew out money without the need for either a strategy or dexterity.