The Gold-For-Paper Exchange Heats Up. With inflation fears subdued, many investors are trading in assets that have traditionally provided wealth protection in exchange for sexier paper assets that are being driven up by the noxious policies emitting from the Federal Reserve. (This will not end well.)
Gold Falls 28% in 2013. After climbing 700% over the last decade, gold prices stumbled 28% this year. This is the yellow metal’s worst annual performance since 1981. The popular gold mining ETF (Ticker: GDX) has suffered even more, falling 55% in 2013… Gold ETF holdings dropped 33% this year, to the least since 2009.
Other Commodities Also Get Hammered in 2013. Additionally, silver turned in its worst annual performance since 1981, falling 35% in 2013. Abundant harvests sent corn prices plunging 39% in 2013, its biggest drop since 1960. Wheat fell 23%, its worst year since 2008.
Chinese Demand Remains Strong. Gold consumption in China increased 29% to 1,000 tons in 2013, the World Gold Council estimates (albeit, the rate of demand growth has decreased the past few months). Investors in China, India, and even Saudi Arabia are increasing their purchases when the price dips below $1,200.
Hold, But Prepare to Back up the Truck. Follow the Money suggests a maximum of 25%-30% of any portfolio in precious metals. Removing the protection provided by gold from any portfolio in these unchartered economic waters would be extremely foolish, in our opinion.
That said, we maintain a “HOLD” rating on both silver and gold. (To see our real-time ratings, subscribehere.)
New investors are wise to proceed with caution around commodities and precious metals in this current market environment. The herd mentality is currently driving stock prices back into the stratosphere but will eventually unwind.
Wealth protection, which has been the major investment theme in the wake of the 2008 market crash, is slowly losing its value to investors who are increasingly mesmerized by soaring equity prices. FTM, and its subscribers, have benefited from this dramatic rise in the stock market this year, as we have long expected markets to trend higher on quantitative easing (for example, we are forecasting the Dow to reach 18,000 before major turmoil begins). However, the fundamentals underpinning the current rise in Western equities are little changed. While stocks and housing prices are rising, personal income levels and the labor market remain in a funk. And overall debt levels remain completely unsustainable. Meanwhile, emerging nations and central banks continue to hoard gold.
Those who disregard the need for wealth protection assets in this tumultuous economy will be surprised when the next collapse comes. It seems the only thing we learn from history is that we don’t learn from history.
Americans are growing upbeat about the economy as household finances improve on the heels of more hiring, rising property values and stock-market gains. (Translation: The Fed’s wealth effect is working.)
You are attempting to view premium content for subscribers only. If you are a subscriber, log in here. If you are not currently subscribed, you can learn more here.
“A Daily Stock Trading Idea for Short-Term Traders”
You are attempting to view premium content for subscribers only. If you are a subscriber, log in here. If you are not currently subscribed, you can learn more here.
PRAISE FOR JERRY 'S BOOK "Jerry Robinson does an excellent job of explaining the 'Petrodollar' system. His book explains exactly how this will come about, but equally important is the comprehensive section on what you can do to protect yourself."
Segment 1: Trump’s Tariff Chaos SEGMENT BEGINS AT 02:35 Host Jerry Robinson unpacks the latest tariff rollercoaster—who’s impacted, how markets are reacting, and what comes next. Topics include: Jerry explains the past week’s tariff timeline and key events How...
(Recorded on 2/4/25) Get introduced to the core concepts of swing trading and learn the key tools and resources you’ll need to get started. Plus, Jerry Robinson demystifies the Trump tariff market effects in this members-only webcast. – DCA Friday Update:...
(Recorded on 1/28/25) In this member-exclusive video, we break down Nvidia’s recent stock crash and explore the role China’s DeepSeek played in the market reaction. We also analyze the broader implications for AI investing and discuss our own...
Please help us spread the word about FollowtheMoney.com on Facebook, Twitter, and any other social media outlets.
Silver & Gold
Call 800-247-2812 now for the best prices on gold and silver coins and receive Free Shipping and Insurance when you mention Follow the Money.
Weekly Newsletter
Stay in the loop!
Sign up today to receive our weekly e-newsletter.