.The Price Of Gold Just Hit A Record High

Notes From The Field By Simon Black

September 12, 2019  San Juan, Puerto Rico

The Price Of Gold Just Hit A Record High

A few hours ago, the European Central Bank announced a bonanza stimulus package: interest rate cuts, money printing, quantitative easing, the whole nine yards.

Europe’s economic growth has ground to a halt. The German economy actually shrank last quarter, according to official statistics.

So the European Central Bank is throwing everything including the kitchen sink at this problem. Their stimulus package is like a monetary defibrillator trying to shock Europe’s economies back to growth.

It’s pretty amazing when you think about it: interest rates in Europe are already NEGATIVE. They’ve been cutting rates for years, and it hasn’t worked.

Back in July 2008, the European Central Bank’s main interest rate was 3.25%.

By the end of 2008, it was clear the global economy was slowing down, and the central bank had slashed interest rates to just 1%.

But they kept going.

By 2013, the ECB had reduced its primary interest rate all the way to zero.

And in 2014, they took the unprecedented step of cutting rates even further-- to NEGATIVE 0.10%.

European rates have been negative now for FIVE YEARS. Yet Europe’s economies are still in the dog house.

These results completely defy prevailing economic wisdom.

According to the ridiculous playbook that nearly all central bankers use, cutting interest rates is supposed to stimulate economic growth.

If interest rates are lower, it makes it easier and cheaper for people to borrow money. If it’s cheaper to borrow money, people buy more stuff… which creates more economic growth.

But that’s not happening.

They’ve been cutting rates, even below zero, to the point that you can actually get PAID to BORROW money in Europe. Yet those economies are still stagnating.

To continue reading, please go to the original article at

https://www.sovereignman.com/trends/the-price-of-gold-just-hit-a-record-high-25562/

To your freedom & prosperity, Simon Black Founder, SovereignMan.com  

.Here’s Every Reason To Avoid Buying A Gold ETF

Notes From The Field By Simon Black

September 9, 2019  Bahia Beach, Puerto Rico

Here’s Every Reason To Avoid Buying A Gold ETF

Buckle up, this one’s going to be entertaining… because I should have called this note “Why you should always read the fine print.”

This morning I read through the prospectus and annual reports of the most popular Gold ETFs in the world.

First, some background:

ETF stands for ‘exchange-traded fund’. It’s sort of like a mutual fund that’s listed on the stock exchange, meaning investors can buy/sell shares of an ETF just like they would buy/sell shares of Apple, Ford, or (God help us) Netflix.

But unlike Apple, which is an operating business with employees, products, revenue, etc., an ETF is NOT an operating business. It’s a fund that merely pools capital to own assets.

The benefit for investors is that ETFs can be an easy and convenient way to invest in certain assets which would otherwise be difficult to buy.

If someone wants to buy Egyptian stocks, for example-- they could open a brokerage account in Cairo… or buy an Egypt ETF that’s listed on the New York Stock Exchange.

The ETF is a LOT easier for most investors.

But there are also ETFs for gold and silver. And I find this mystifying.

We’re not talking about Egyptian stocks. Gold and silver are easy to buy. You could have Canadian Maple Leaf gold coins delivered to your home with a few mouse clicks.

So gold ETFs provide no added convenience.

Yet there’s an enormous amount of downside.

First off-- it’s important to know that if you buy an ETF, you’re paying for a ton of unnecessary expenses.

The ETF has to pay custodian fees, marketing fees, listing fees to the New York Stock Exchange, audit fees, management fees, etc.

I’m chairman of the Board of Directors for a company that’s listed on a stock exchange, and trust me-- the listing fees are REALLY expensive.

If you own physical gold in your own safe, you wouldn’t have to suffer the cost of paying lawyers, auditors, and investment bankers.

But GLD does. Which means that as a GLD investor, YOU are fundamentally paying those costs.

And remember that ETFs aren’t operating businesses. Apple makes money selling overpriced hardware. But GLD has no products, and hence doesn’t generate any revenue.

To continue reading, please go to the original article at

https://www.sovereignman.com/investing/heres-every-reason-to-avoid-buying-a-gold-etf-25548/

To your freedom & prosperity, Simon Black Founder, SovereignMan.com

.Here’s A Really Unique Way To Own Gold

Notes From The Field By Simon Black

September 5, 2019   Bahia Beach, Puerto Rico

Here’s A Really Unique Way To Own Gold

Last week we dove into a series about different ways to own gold. And I explained in that first article why it’s a great idea to own physical bullion-- gold you can hold in your hand.

With physical gold, there’s no middleman standing between you and your wealth. And when properly stored, it’s very difficult for some frivolous creditor or out-of-control government agency to steal it.

When it comes to physical gold, I explained that I prefer gold coins over gold bars.

Gold bars are completely non-uniform. A typical 400-ounce gold bar (like the ones you see in the movies, or that you imagine are stacked up in Fort Knox) could weigh as little as 350 ounces, or as much as 430 ounces. They’re all different.

On the other hand, 1-ounce Canadian Gold Maple Leaf coins are generally all the same. They’re uniform… minted and crafted to the exact same standard.

The uniformity of gold coins like the Canadian Maple Leaf makes them much easier to buy/sell.

If you want to buy or sell a gold bar, it has to be weighed and assayed with special equipment first. But if you want to buy or sell a Maple leaf, it’s simple-- because the coins are pretty much all the same.

Now, there’s one special sub-category of gold and silver coins that are worth mentioning: collectible coins.

Collectible coins, just like Canadian Maple Leaf coins, have value because of their gold or silver content.

But collectibles also have additional value for their rarity.

Whereas the Royal Mint of Canada produces new Maple Leaf coins every single year, no one can go back in time to mint more Venetian gold ducats from the 14th century.  There are only a fixed number of those coins in existence.

Because of that, collectible coins sell for a significant premium to the value of their gold or silver content.

This concept of ‘premium’ is an important one: ALL coins, whether a rare coin or a bullion coin like a Canadian Maple Leaf, generally sell for an additional amount above the gold price.

That’s because, unlike a gold bar which is simply poured into a cast (and rather unevenly at that), a coin has a lot of craftsmanship that goes into the minting process. It’s more expensive to produce, therefore it costs a bit more.

That premium can be between $20 and $150 per coin.

To continue reading, please go to the original article at

https://www.sovereignman.com/investing/heres-a-really-unique-way-to-own-gold-25537/

.Here’s A Dirty Secret Few People Know About Gold

Notes From The Field   By Simon Black

August 26, 2019   San Juan, Puerto Rico

Here’s A Dirty Secret Few People Know About Gold

In 1962 in a picturesque setting in Santa Barbara, California, two local entrepreneurs opened a low-cost, roadside inn where the nightly room rate was just $6.

They called it Motel 6.

And today the chain has grown to over 1,400 locations.

If you want the most straightforward explanation for why you should own gold, consider your local Motel 6.

It’s noteworthy that, today, the very same Santa Barbara location now rents its rooms for nearly $90 per night.

That’s a 15x increase in 57 years, an average increase of roughly 5% per year.

Are the rooms 15x bigger, or 15x nicer? Not really.

The reason the price has increased so much is because of inflation-- the gradual erosion of the US dollar’s purchasing power over the past several decades.

This is why it’s important to have a conversation about gold.

Unlike paper currencies, gold has a 5,000 year track record of keeping up with inflation.

In fact, when priced in gold, a room at the Motel 6 has actually gotten cheaper.

Back in 1962, an ounce of gold would buy you about 6 nights at the motel. Now, despite the 12-fold increase in the price of a room, one ounce of gold will buy you 21 nights there.

That’s because the price of gold has largely outpaced the rate of inflation and the decline in the purchasing power of the US dollar.

Gold is a fantastic long-term store of value. It’s also an insurance policy-- a hedge against paper currency, systemic risk, and uncertainty.

And there’s plenty of those in the world.

But there’s also a number of catalysts emerging right now that could send gold prices substantially higher in the near future, so it may be worth considering gold right now as a speculation.

There have been several times in history where gold has experienced wild swings in value against paper currency. And some people got very rich from it.

In the coming days and weeks, I’ll be writing a series of articles on different ways to own gold.

And it’s my hope that you’ll use the information to as part of your Plan B, not only to hedge against looming risks, but also to potentially profit from uncertainty in the system.

To continue reading, please go to the original article at

https://www.sovereignman.com/trends/heres-a-dirty-secret-few-people-know-about-gold-25505/

To your freedom, Simon Black,  Founder,  SovereignMan.com

.4 Compelling Reasons To Be Thinking About Gold

Notes From The Field   By Simon Black

August 21, 2019   San Juan, Puerto Rico

4 Compelling Reasons To Be Thinking About Gold

From time to time it’s important to take a giant step back and take a fresh look at everything that’s going on with a big picture perspective.

The last few weeks have been nothing short of incredible… so many important things happening that have never happened before ever. Let’s take a step back together:

1) $50 Billion To “Elevate Your Consciousness”

As we discussed on Monday, WeWork filed its formal IPO paperwork in the United States last week, indicating that the company will be worth nearly $50 BILLION when it goes public.

WeWork has never turned a profit. It doesn’t expect to turn a profit. It doesn’t have a plan to turn a profit. And it claims its mission is to ‘elevate the world’s consciousness’.

WeWork owns no real estate. It has almost no assets. In fact, WeWork’s primary asset is the office space it currently leases (i.e. does not own).

And to be fair, they’re leasing a LOT of space. WeWork hopes to eventually lease 40 million square feet of office space.

But at $50 BILLION, investors are essentially paying $1,250 for each square foot of office space that WeWork is LEASING.

That’s almost as expensive as what it costs to BUY in New York City.

Talk about overpaying.

Then there are the ridiculous shenanigans of WeWork’s co-founder/CEO Adam Neumann, who has a history of unethical behavior.

Neumann charged his own company nearly $6 million for the “We” trademark earlier this year. He borrowed money from the company to buy real estate that he immediately leased back to WeWork.

And now he’s selling shares in this IPO to investors which have dramatically diminished voting rights… further cementing his power over the company.

So not only are investors dramatically overpaying for a company that has very few assets and burns cash with no end in sight, but they’re willingly giving up control to someone who has a history of enriching himself at their expense.

 2) Yikes! Interest rates

But perhaps even more insane than WeWork (if that’s even possible) is what’s happening with interest rates.

To continue reading, please go to the original article at

https://www.sovereignman.com/investing/4-compelling-reasons-to-be-thinking-about-gold-25490/