In this post, I want to discuss the idea that’s there’s not much time left to accumulate gold and silver at reasonable prices.
Now this is an important topic and my goal in this article is not to tell you what to do or how much to buy, but to give you the information so you can make the decision yourself.
A Market Crash?
Now generally speaking, there are many who believe that some sort of market crash or economic disastrous scenario will occur soon. Many speculate assets like gold and silver will significantly spike in value due to investors flocking to safe assets.
For example, Economist Harry Dent gave an interview to Fox Business news on June 10th, 2024. In the interview, he described the bubble of all bubbles bursting and the stock market decreasing in value 90 percent. This means if you had $100,000 in the stock market you would be left with $10,000.
Of course, this would wreck lives for many Americans especially those heavily invested in the stock market. In addition, it would send stock prices lower around the world as well.
While Dent’s prediction might just sound like Doom and Gloom, there’s actually sound logic behind it. He notes that before the great depression it was a natural bubble and today with so much stimulus, it will lead to a much more severe downturn.
Many mock Dent and accuse him of just being doom and gloom. They also point out he’s been doing this for years and his predictions have never come true.
Still, there’s good reason to believe a market crash like this could come and we could see a huge correction in the market.
Stock Market Bubble
For one right now, the stock market is being driven by just a handful of companies.
Nvidia is up over 140% just this year and has driven half the gains of the S&P 500.
There’s no question that’s it’s a solid company, but Nvidia makes semi-conductors and pretty much has no competition right now. That said, that is quickly changing and with more semiconductor companies entering. The fact is increased competition, possible regulation and the real possibility that AI doesn’t deliver on results will devastate this stock price.
We’ve seen this before in the dot com bubble with companies being valued based on potential than actual profitability.
Now we know Much of what is driving the stock market today is speculation around Artificial Intelligence.
Coming back to Dent’ prediction it really doesn’t seem that far off in my opinion. Maybe it doesn’t drop 90 percent, but the market drops 60 or 70.
What Does History Say?
Remember that during the great recession, in Oct 2009, the Dow Jones Industrial Average closed around 14,000. In March 2007, it was down to 6,500. That’s around a 50% drop over a two-year period.
If this does happen, what can we expect from precious metals?
I believe we will see a lot more people buying up precious metals and it will really drive up the price. If you remember back in 2008-2009 both the stock market and the real estate market crashed, and many ask why did precious metals decline in price 30%? The primary reason this occurred is simple: people had to liquidate assets to have cash to pay bills and other mandatory things. At the end of 2008, gold went down from around a $1000 an ounce to about 750 or 800. But what happened next is really important. From 2009 to 2012, gold would shoot up to around $1800.
So, we could see a dip in price, but I believe this time a massive number of people will head into the precious metals. Many might ask why?
The answer is simple: We didn’t have social media back then. Or we didn’t have it to the extent we have now. I know there was Facebook and YouTube was in the early years, but the point is that most people just used social media to connect with friends.
At that time, pretty much everyone relied on the mainstream financial news for current events. Without question, it is much different now and that trend is likely to only continue. I expect that more and more people will wake up as the dollar becomes further devalued.
Is gold or silver better when SHTF?
Do we have time to accumulate more gold and silver?
Coming back to the initial question, I think there is still time although the clock is surely ticking. There’s so many things that could collapse the artificially stimulated economy. In the US there is clearly a lack of productivity as work ethic has declined and production of goods has dropped for decades.
In sum, I think there is time to still accumulate precious metals at reasonable prices. In time though, we should expect to see the dam burst and precious metal prices to spike.
