As we’ve all been told, Gold is a monetary relic that has no relationship to modern money Xs and Os stored in computers. Well, that’s mythology or a big fat lie. Here’s news that the Central Banks have accumulated another 1,300 Tons of Gold.
Here’s another factoid about Gold.
The price of gold is expected to reach an all-time high of $3,000 by the end of 2021 on the back of record central bank balance sheets and government fiscal deficits, according to Bank of America (BoA), increasing its price estimate by 50%.
Gold has been one of the best-performing asset classes this year. Only the wild and crazy NASDAQ index and Silver, yes physical Silver, have outperformed Gold.
Federal Reserve Gives 2021 Gold a Boost
Now, let’s add in the Fed announcement on Dec 16 that said it would buy at least $80 billion per month of Treasury bonds and $40 billion of agency mortgage-backed securities “until substantial forward progress has been made toward the FOMC’s maximum employment and price stability goals.”
Let’s do the math: 12 months times $120 Billion = $1.4 Trillion Dollars over the next year. What is the Fed using for money? Nothing. They just create the Dollars out of thin air to support the Bond market.
Add in the Trillion Dollar stimulus floundering around Congress and a million dollar budget deficit and that’s a lot of fake money on top of the $4.5 Trillion created in 2020 as Coronavirus stimulus.
Start Worrying About Inflation
If you aren’t worried about inflation yet, we understand. But you need to be seriously concerned about the delayed effect monetary stimulus in 2020 will have 12-15 months later.
Inflation will be rising faster and higher than most people believe in 2021.
Money creation is the enemy of every Dollar you hold. Inflation can prove very damaging to most IRAs and 401k plans. Individual investors may be at high risk without proper balance and diversification to protect from inflation.
Take a hint from the world’s central bankers who are hoarding away Gold, not Dollars. They’ve reportedly hoarded away 1,300 Tons of Gold in the past year.
Add a little Gold. Add a little Silver— you’ll be glad you did.