/biz/ - Business & Finance

This pullback which we just had in gold is going to be the last one. Soaring precious-metals prices are imminent.

The yield on the ten-year treasury has already risen to 0.90%. This means that, in spite of trillions of dollars in money-printing so far, the Fed still can't keep interest-rates down. They now have two choices:

1) Let interest-rates continue to rise. This is impossible. If the Fed lets them get to even 5%, the stock market and the government collapse, owing to the size of the debt. Even raising rates to 1 or 2% crashed the markets last year, forcing the Fed to lower than again.

2) Impose a formal cap on rates and print the currency into oblivion to keep them down.

The Fed is going to take the second choice, imminently. Once that happens, the bond market will crash, because investors will know that real yields on bonds are going to be something like -10%. There will be a mass exodus into gold and silver, and junior mining stocks will go up twenty-fold.

Remember, the coronavirus hoax is the excuse, not the reason, for the crashing economy. The economy was already crashing long before. The dichotomy which I present, to inflate or to default, is the reason why gold had already risen from $1200 to $1500 before the lockdowns started. Investors know what is coming.

This pullback which we just had in gold is going to be the last one. Soaring precious-metals prices are imminent.

The yield on the ten-year treasury has already risen to 0.90%. This means that, in spite of trillions of dollars in money-printing so far, the Fed still can't keep interest-rates down. They now have two choices:

1) Let interest-rates continue to rise. This is impossible. If the Fed lets them get to even 5%, the stock market collapses, owing to the size of the debt. Even raising rates to 1 or 2% crashed the markets last year, forcing the Fed to lower than again.

2) Impose a formal cap on rates and print the currency into oblivion to keep them down.

The Fed is going to take the second choice, imminently. Once that happens, the bond market will crash, because investors will know that real yields on bonds are going to be something like -10%. There will be a max exodus into gold and silver, and junior mining stocks will go up twenty-fold.

Remember, the coronavirus hoax is the excuse, not the reason, for the crashing economy. The economy was already crashing long before. The dichotomy which I present, to inflate or to default, is the reason why gold had already risen from $1200 to $1500 before the lockdowns started. Investors know what is coming.