Written by Chris Marcus for the Miles Franklin blog.
Back in 2008 and 2009 many investors lost a lot of money when they were caught off guard by the collapse of the subprime market. Most of them, and possibly even yourself wish they had been able to spot the signs in advance and position their investments differently. But while you may not be able to do that, what if you were able to see the next big market move in advance?
Fortunately if that sounds like something you would be interested in, then you’ll want to keep reading. Because the signs of where the gold market is headed are there for those who choose to look. As just a month after Hungary decided they wanted their gold back, now Turkey is the latest nation to decide that they don’t trust the western banking system to safely hold their gold.
In one sense, the move hardly comes as a surprise. For a variety of reasons. Perhaps most of which are reflected by the recent comments of Turkish president Recep Tayyip Erdogan.
“Why do we make all loans in dollars? Let’s use another currency. I suggest that the loans should be made based on gold.”
While hearing these comments is shocking to those who haven’t been tracking the steady move away from the dollar, they do match the growing sentiment of frustration towards the financial, political, and monetary policies of the U.S.
Additionally, Turkey likely noticed the growing list of nations that have asked for their gold back (which now includes Venezuela, Germany, Austria, Belgium, Hungary, and the Netherlands ) and realized there might be a reason for those requests.
After all, the Federal Reserve continues to refuse an audit. While the last time anyone was allowed any sort of access to the vault in Fort Knox was 1974 (and that was hardly a convincing display in its own right, as you can see for yourself in the video below).
And despite Steve Mnuchin’s somewhat bizarre visit to Ft. Knox last year where he reportedly just said “I assume the gold is still there” without providing any evidence, it seems like foreign investors, who in many cases are creditors to dollar financing are no longer willing to just take his word for it. And why would they, given the past behavior of the U.S. financial and political industries?
After all, when the Germans asked for their gold back in 2013 they were told they could have 10% of it over the next 7 years! I still have yet to find any official explanation of why that was, and when you really think about it, it’s beyond incredible. Because what investor would be interested in doing any financial transaction and then be ok with hearing that it’s going to take 7 years to get their money back? Would you be ok with that?
There’s been a lot of analysis about the potential of a short squeeze caused by someone showing up for their physical metal only to find out the well has run dry. And when you think about the conditions likely required for such an event to occur, seeing nations increasingly demand their physical gold is at the top of the list. Which is exactly what we’re seeing happen right now.
Keep in mind that anytime you move precious metals it costs money. So that countries are going to the effort and expense to bring their metal back home is a significant development. And given how rising interest rates have finally stalled the decade long stock, bond, and real estate rallies, the pressure building on the metals market is continuing to grow.
The good news is that being aware of these developments gives you the opportunity to be on the right side of the trade when the markets are repriced. So if you still remember 2008 and want to get a different outcome this time around, having physical precious metals in your possession gives you the opportunity to be ahead of the market.
And the best part is that you don’t have to take my word for it. Because the developments leading towards that ultimate outcome are now in plain daylight for anyone to see.
–Chris Marcus
To buy or sell gold and silver call Miles Franklin today at (1-800-822-8080).
