Are we on the eve of a new bull market in gold? Ron Paul shares his thoughts below in a Special Market Update. Are we on the eve of a new bull market in gold? Ron Paul shares his thoughts below in a Special Market Update. Are we on the eve of a new bull market in gold? Ron Paul shares his thoughts below in a Special Market Update.
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Gold's Bear Market Mystery
00:02:05
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| Hello, everybody, and thank you for tuning in to the market report. | |
| Today, I'd like to talk a little bit about gold and whether or not we're in a bear market or a bull market with gold. | |
| That is one of the most frequent questions I get asked about what's going to happen to gold. | |
| Is there going to be a bull market again? | |
| I've been watching the gold market for a long time, even before we were even allowed to own gold in this country. | |
| And getting involved in Austrian economics in the 1960s, the predictions were made that the pseudo-gold standard of the Bretton Woods agreement, where the dollar was as good as gold at $35 an ounce, would come to an end. | |
| And those predictions came true on August 15th, 1971, when Nixon closed the gold window and actually admitted that we were defaulting on our promises. | |
| And it brought in a chaotic decade in the 1970s at a time when I started speaking out on money. | |
| Monetary policy fascinated me and in a way accidentally got involved in politics on this issue. | |
| But the bull market started on August of 71 and it ended at the end of the decade in 1979 and 1980. | |
| Gold topped out over $800 an ounce. | |
| Very, very sharp spike up and then down. | |
| And then it went into a bear market. | |
| It went into a bear market for 10 years, 20 years from 1980 up to the year, the new century. | |
| Gold went from $800 down to $270. | |
| $270 at the end of the century, the year 2000, it went back into a bull market. | |
| And from 270 at the beginning of the century up until 2012, it went up to $1,800. | |
| But then for a couple years, beginning up until 2016, the correction was $1,800, which was pretty darn high, on down to a little over $1,000, $1,050, and that occurred in 2016. | |
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Cryptocurrencies And Price Inflation
00:07:26
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| And that was a shorter bear market. | |
| But since then, gold has gone up. | |
| You know, each year it's gone up for $250, but it's almost invisible. | |
| Nobody cares about it because there are other things going up much faster. | |
| But I believe that was the date of the third bull market in gold and that it will hold and will continue to rise because we haven't factored into the system all the spending and all the debt and all the price inflation that we have seen in recent months and recent years. | |
| So I think this will continue. | |
| And right now it's hovering around $1,300. | |
| Technically, and the technicians see this as a resistance area, and someday that resistance will be broken and then it's going to break out and represent all the money we created after the breakdown of the monetary system and the financial system in 2008 and 2009. | |
| And we still haven't discounted all that money sitting around. | |
| But it's starting to come out and it's starting to play havoc with prices, even though they say the CPI is not doing badly and they want the CPI to grow more because that would help the Federal Reserve manage monetary affair. | |
| But if you look around, you can find a lot of price inflation going on. | |
| You can look at housing. | |
| You can look at bonds. | |
| You can look at medical care. | |
| You can look at education. | |
| You can look at the oil prices. | |
| But CPI is not going up, so we don't have real price inflation yet. | |
| But there's a lot out there going on. | |
| And right now, I would say that it's going to different places. | |
| I have a suspicion, there's no way to know this is the case, that maybe a lot of those dollars floating around are finding a haven in cryptocurrencies. | |
| And just think of what's happened to cryptocurrencies. | |
| You know, the capitalization of cryptocurrencies over $300 billion. | |
| Well, it had to be bid up somewhere. | |
| There had to be somebody seeing it. | |
| There could be the independent innovation and all the things going on with cryptocurrencies, but there also has to be dollars bidding it up. | |
| So you could have a cryptocurrency innovation, but not necessarily knowing exactly what the price should be. | |
| So if you have an artificially large amount of cash chasing certain goods, it just may be that under certain circumstances, some of that money might flow into something like cryptocurrencies. | |
| It went into bonds. | |
| Look, bonds are gigantic in price, and that's why there's no interest rate. | |
| So that's not very rational or historic. | |
| But I don't see any reason why there couldn't be a case made for saying maybe these dollars have floated into the cryptocurrency market, which doesn't discredit the cryptocurrency, but it also might indict this whole thing of malinvestment, and that is an increase in prices that outperforms the amount of money there is. | |
| Ultimately, prices go up for the most important reason is that money gets increased. | |
| The money supply gets increased and the dollar goes down. | |
| Right now, we live in a period of time where the dollar is on a slope downward. | |
| If you look at the dollar from 1971 on, it's horrible with all the currency. | |
| If you look at the last two or three years, the dollar again is going down, which means that the dollar, since gold is priced in dollars, and the dollar gold would go up as the dollar goes down. | |
| But gold is not very exciting right now. | |
| It's nearing that point of 1,300. | |
| People are watching it closely. | |
| Nobody would be getting excited, say, hey, gold is in the bull market, because nobody really absolutely knows that. | |
| But it is my suspicion in watching this that we did start beginning of last year into a new gold bull market and that time will tell. | |
| And this does not mean that anybody has proof that it won't have some reason for correcting and outfoxing the people who make predictions. | |
| But my suspicion is that this will happen and that we will be in a bull market, regardless of what happens to the cryptocurrencies. | |
| I think that the cryptocurrencies in some way may be a signal of what's happening as another price, indicating there's a lot of money out there. | |
| When there's a lot of money, there's a lot of misdirection and malinvestment and bidding things up out of proportion to what they're really worth. | |
| And then there has to be a correction. | |
| So time will tell if that suspicion is correct. | |
| But my point today is simply this: I believe we're in the early stages of the third bull market that I have witnessed and monitored throughout my life, especially getting interested way back in the 1960s. | |
| Actually, I got interested in the monetary policy when we actually had silver coins, and I collected coins and that sort of thing as a young person, but then followed through by looking at the fascination of how monetary policy operates. | |
| So I would say that we're definitely moving in the direction of higher prices for gold. | |
| People will be able to trade on this. | |
| I don't trade it because I think you have to have stronger nerves than I would. | |
| So I don't do that. | |
| Other people do, and some make a lot of money doing it. | |
| But I've always thought that gold was, in a many way, under today's conditions, more of an insurance policy. | |
| You can be on your personal gold reserve standard. | |
| If you have excessive funding, you save your gold, and that's your backup in case things go badly for you. | |
| And it has stood me well over the years. | |
| But I think we, and I could list many, many more things why the economy is much more precarious than they want to admit. | |
| Because, you know, just today there was a statistic that came out that we're at a 17-year low on consumer confidence. | |
| And yeah, and that for a few minutes had diminished the price of gold. | |
| But I'm not sure how they do those statistical studies because, you know, 50% of our population are very unhappy and they have essentially zero wealth compared to three very wealthy people. | |
| And that's the reason there's such great gross distortions in the economy. | |
| So I would say that things don't look quite as good as some of the statistics shows. | |
| And the consumer confidence is it measuring? | |
| Are they talking to the 95 million people who have dropped out of the workforce? | |
| That's a historic high. | |
| So I suspect that those numbers of optimism and the unemployment figures don't mean a whole lot. | |
| And even the stock markets, you can find other things other than an inflationary speculation building up, as well as buybacks that are concerned and borrow and more debt and this sort of thing and propping up and propping up markets. | |
| So let me conclude by saying, yes, I think we're in a bull market for gold and time will tell whether I'm right on that. | |
| But I want to thank you for tuning in today for this market update. | |