When it comes to global elites, those who know don’t talk and those who talk don’t know, or so the story often goes in mainstream media. However, markets allow us to track big investor footprints through volume and announcements in financial publications. For hundreds of years gold has been what buyers flock to when economics become uncertain.
The trades of big banks tell much of the story how elites are investing. In 2014 perceptive investors began to notice that smart money was purchasing gold bars. This accumulation marked an increase of nearly 250% through the year. It was also a period when sales of gold coins doubled, which signaled a buyer’s market. Big players rushed toward expensive 440 oz. gold bars valued at $535k, which small investors could not afford.
Baron Rothschild set the standard for contrarian investing in the 18th century when he proclaimed, “the time to buy is when there’s blood in the streets.” That statement is somewhat the exact opposite of what a lay person might think. But that’s how big bankers roll. First they steer the herd in one direction, then profit in the other, especially during periods of economic turmoil.
It’s actually a simple concept if you use a regular supermarket analogy. The store buys an apple at a low price then wants to sell it at a higher price. That’s just like how bankers sell at higher prices than they bought, even if it takes several years to get the market conditions they desire. Get it? Often these elites create media hype that prices are rising at times they want to sell. Conversely they flood the market with doomsday reports when they want prices to drop so that they get buy below the market. Gold often behaves as an inverse to an overall bull market.
Market prices revolve around the concept of supply and demand. Even though gold is one of the most plentiful metals on earth at a micro level in the ocean, it would cost too much to extract all of it in physical form. Furthermore, exploration and mining for this classic shiny metal has slowed down so much that it creates somewhat of an artificial scarcity, which helped drive up the price during the first decade of the new millennium.
Prices surged during the hysteria and aftermath of the financial meltdown, peaking above $1,800 in 2011, before reversing over the next half decade, then slumping through early 2016. While the 2014 buying spree was short lived, followed by a disappointing decline, 2016 appears to be a different story. Since January when it traded below $1,100, it has jumped through upward waves, moving above $1,300 in the summer. So what’s the underlying story here?
Elites Shift Gears
In May 2016 JP Morgan began recommending to its multi-millionaire clients that they take positions in gold to prepare for a new bull market in the commodity. The bank also announced its plan to require minimum accounts of $10 million in investable assets for its elite investors. Whispers among traders began to grow that the metal is poised to move much higher, as it has proven to be a top performing asset class for the year.
Then the Cointelegraph reported on August 22, 2016 that Lord Jacob Rothschild announced that his elite banking family was reducing positions in the U.S. dollar in favor of gold and other currencies. The reason was over monetary policy and declining yields. Pessimism is surfacing in places like Greece, Venezuela and Argentina as Spain and Italy contemplate exiting the European Union, like the Brexit vote earlier in the year for Britain.
Gold as a Hedge
The inference is that the Rothschilds are preparing for a global market crash, which echoes what author Thom Hartmann has been saying since 2013. His book The Crash of 2016, has helped stir up paranoia about how the Federal Reserve has stretched itself too thinly and that a widespread economic collapse is inevitable.
Meanwhile, billionaire George Soros is buying the commodity. He explained to the Wall Street Journal that weakness in China is causing deflationary pressure. He also pointed to how fiat currency of the global central banking system has failed to resolve the debt crisis, echoing Hartmann’s downbeat projection. So when all else fails, the mantra has always been buy gold. It’s traditionally been considered one of the safest investments during bad times, even though ownership was restricted during the Great Depression.
China is also looking to buy gold in conjunction with planting seeds to a digital currency. Meanwhile, Russia has tripled its gold holdings the past decade. With prices up over 25% in 2016, coinciding with rising inflation, it’s not a stretch to believe that something is happening with it as a hedge against the broader market.
Strategic metals have many of the same asset fighting properties as gold, and are purchased and held for many of the same reasons. Because of their strong industrial demand in items we need every day for our survival, they will maintain strong power against a failing dollar and inflation.
In fact, because gold has little industrial value, but these metals do, the potential for price increases in strategic metals might be better.
It’s time to turn the old saying “Do what I say, not what I do,” on its head, and instead do what the elites, billionaires, and others in the know are doing. Buy and hold physical metals. Download our free information package for more information.