The Big Story – Gold & The Dollar – Part 1

Featuring Brent Johnson

Is the recent breakout in gold the start of the next bull market? Or is a return to form for the dollar going to stifle that surge? Brent Johnson of Santiago Capital is on a mission to find out. In Part 1 of this series, Brent speaks with a number of highly regarded gold commentators to build a consensus view. In Part 2 he digs deeper into the dollar’s outlook. Finally, in Part 3, Brent wraps everything together with an in-depth interview with gold market expert, Peter Schiff

Published on
9 October, 2017
Topic
Gold
Duration
25 minutes
Asset class
Bonds/Rates/Credit, Commodities, Currencies
Rating
85

Comments

  • EC

    Edward C.

    14 10 2017 12:13

    2       0

    Big fan of the topic as well as Brent. RV does it again! I think Grant has mentioned it a couple of times but it's crucial for people to think about and understand the difference between exposure to gold and exposure to the price of gold. In terms of generational time horizon, I would advise all to ensure you hold some physical. No doubt those coins will have at least some purchasing power when passed to the grand kids and out of the system! Same cannot be said for the principal returning on those 100 year bonds. That is the exposure to gold I want long term.
    Different to exposure to the price of hold i.e. Making/losing pnl on the price be it though GLD, miners, options etc. And in this space, I would warn all to be wary of the leveraged ETFs. Most retail investors are not aware that they re-hedge daily. If market is choppy with lack of momentum, the decay will be painful.

  • AH

    Andreas H.

    13 10 2017 15:22

    0       0

    Interesting!

  • GR

    Guido R.

    12 10 2017 03:07

    1       0

    If all countries are debasing their currencies, is that not US$ positive?

    If countries have sold sovereign debt in US$ over the past 10 / 20 years, is it not counterproductive to debase their currencies? Do they have a choice?

    If global pension funds and sovereigns are loaded to the gills with US bonds and treasuries, do you feel the Fed will assist them by maintaining the exchange value of the US$ low?

  • CH

    Calvin H.

    11 10 2017 23:34

    0       0

    Yeah! Peter Schiff coming up!

  • SS

    Suresh S.

    11 10 2017 14:51

    1       0

    I don't think anyone will argue the importance of having exposure to gold be through physical or equities. The argument that I would like to hear is why would gold not fall as in the past each time USD rallies, more often than not, this would likely occur. Also with the cost of holding gold being higher than holding cryptocurrency, why wouldn't gold price fall first before a strong bull rally? Based on ISM, the market is likely to go higher with new orders showing higher numbers, which at least in the short term, gold could fall further as the masses will likely take on the risk in equities.

  • ss

    sean s.

    10 10 2017 23:26

    8       0

    In my opinion, the major headwinds that retail coin dealers are experiencing year-to-date can be attributed to the rise in Bitcoin and other Crypto Currencies. I know, it's a simple explanation, but I think its an accurate one. Gold may be up 12% but some Altcoins are up as much as 6000% and that is very alluring for investors that have seen their investments go mostly sideways for years.

    Cryptos are also seen by some (not all) in the gold community as a hedge against central banks and something out of government reach, which are attributes that are attractive to gold and silver bugs.

  • Pc

    Porter c.

    10 10 2017 22:49

    8       0

    We need to hear a rational gold bear's perspective.

    • aa

      asdfasdf a.

      11 10 2017 09:01

      0       0

      second. devil's advocate always has value

    • MD

      M D.

      16 10 2017 09:25

      1       0

      Third. Real Vision has never put forward the bear case.

  • KA

    Kelly A.

    10 10 2017 22:01

    3       0

    Did i miss the transcript?

  • DF

    Dave F.

    10 10 2017 15:22

    3       0

    As of this AM....getting a nice bounce higher in gold/GLD off the trend-line I noted in the video....patience still required. Move is impulsive (good to see) and above $123.30-$124.90 would really put the bulls in a good position.

  • MS

    Matt S.

    10 10 2017 13:53

    1       4

    24 minute video about lack of public interest in gold...... less than 30 seconds about Bitcoin? You guys.... lol

    • PR

      Paolo R.

      10 10 2017 14:24

      7       13

      Bitcoin is a fraud and can be debunked... no point in waisting my time listening to talking about pokemon coins.

    • RP

      Raoul P.

      10 10 2017 18:26

      10       0

      Its a gold series in three parts. We have plenty of bitcoin content too and have been big supporters since we launched in 2014.

    • MS

      Matt S.

      11 10 2017 07:14

      1       0

      Okey dokey

    • MS

      Matt S.

      11 10 2017 07:15

      1       0

      Paolo R - please! Let's hear your debunking.

  • AF

    Andrew F.

    10 10 2017 11:48

    1       0

    There is real potential to the upside if you do your research and be patient for the move. I believe it's soon.

    Thanks for another great insight. Can't wait for the next two parts.
    Thanks again RV.

  • JC

    Joel C.

    10 10 2017 05:16

    1       0

    Good piece, nice and succinct. But how about a more general 'precious metals' segment, rather than the full focus on Gold? Yes Silver was mentioned a few times, but for novices not enough context to enable an investment thesis in my mind. i await parts 2 and 3 with interest.

  • HM

    Hot M.

    10 10 2017 03:04

    0       0

    There are 187k tons of gold mined. A portion is held by central banks. Unless there are thousands of tons of unpurchased, warehoused physical stock, its interesting to think that all of that gold is owned by somebody. Interesting also that the LBMA trades annual physical production-equivalent on a daily basis. It is curious, for a commodity that isnt consumed, why such a large paper market exists (surely demand/supply issues can be settled by price alone?).

    This goes into this perspective in greater detail. http://fofoa.blogspot.hk/2017/05/how-gold-is-different.html

  • GB

    Grant B.

    10 10 2017 00:18

    7       0

    You should have interviewed Michael Oliver of MSA.

    • DB

      David B.

      12 10 2017 13:22

      0       0

      Coming in part 2 !

  • gg

    gurdeep g.

    9 10 2017 20:58

    5       0

    Simon Mikhailovich... a real G! Keep it up RV

  • WS

    William S.

    9 10 2017 20:30

    8       12

    Why the heavy metal segues? Makes it feel a bit too much like 'Wayne's World'. Something a bit more professional?

    • MS

      Matt S.

      10 10 2017 13:42

      3       0

      it's "modern" William

    • CH

      Calvin H.

      11 10 2017 23:52

      0       0

      I am with you..overly dramatic. Head bangin. 😎

  • NI

    Nate I.

    9 10 2017 19:52

    2       0

    I was looking at the US Mint numbers that Simon Mikhailovich cited. You can get them here - I shortened the URL because it's elephantine (http://tinyurl.com/yc6n3rau). I see where Simon obtained his value of 315,000 for 2003, but if anyone understands how the US Mint adds 96000 + 72000 + 56500 + 33000 + 2000 + 7000 + 24500 + 14000 + 14000 + 56000 + 47000 + 46000 and obtains 315000, I would like to understand their methodology. I'll watch for replies. Maybe it's calendar versus fiscal or something. Thanks.

  • EL

    Elizabeth L.

    9 10 2017 18:24

    9       0

    Thank you Brent for this update on gold and the dollar. For me, this was a very valuable piece. I would appreciate you doing this type of update on a regular timely basis. I like the fact that you talked with many of our RealVision contributors to keep us up to date on their thinking. Great Job!

    • EL

      Elizabeth L.

      9 10 2017 20:36

      8       2

      I wish to add that for those who are newer to RealVision, it might be helpful in these updates to add links to the earlier interviews where the interviewees have fleshed out their thesis.

  • MN

    Mark N.

    9 10 2017 18:16

    2       1

    Quite annoying habit that Brent and I seem to share; to fill the micro gaps between sentences with "hmhm" and "yep". Other than that solid piece. Simon stood to out me, he's so eloquent.

    • BJ

      Brent J.

      12 10 2017 18:32

      3       0

      This is a great comment...didn't even realize it was happening. Thanks for the feedback...will do better!

  • CD

    Chris D.

    9 10 2017 16:07

    8       5

    Great info. But, no investment story on gold/silver is complete without addressing the (for some, big) elephant in the room: gold manipulation. For those of us who pay attention, the price manipulation (i.e. suppression) is blatantly obvious. A predictable ramp of the USD/JPY every single day (on a given time essentially), recurring smashes during hours of low liquidity and outright intervention to "allow" or "cap" the maximum of +1% (on the upside) a single day for gold (a smash of +3% is on the other hand highly welcomed).

    They have done a great job on absolutely killing sentiment and "painting" the technical picture as they so please.

    Sorry guys, but I used to believe that we would wake up one day and see the free-market overthrow the cartel. First at that point would a true price discovery emerge. In reality, the paper game is the only game in town. No matter how much I yearn for sound money and freedom, it seems that the will of the general public is towards FRNs, debt and an ever-expanding credit cycle.

    I have tried to reason the "Hugh Henry"-way with the notion of a world that is "gradually healing" and that "everything is fine no matter what the 'doomsayers' predict". But once you recognize the epic scale of the malinvestments (pension funds, retail investors, China, European fixed income, etc), the exponential expansion of the balance sheets of G5-central banks and the complete lack of credibility of government statistics, you will see danger everywhere. When also realizing that the price of free market money (i.e. gold/silver) is rigged to the downside, there is only one choice: spend it. Or accept the eternal erosion of purchasing power. Or gamble in bitcoin. Or in the S&P 500.

    Sad, I know. And I feel truly sorry for the hard-working every-day Americans who tries to save in a game of monopoly.

    I guess they do call it "the Matrix" for a reason.

    • EF

      E F.

      9 10 2017 17:20

      1       3

      I honestly have never really understood the manipulation talk. There is only so much gold in the world and the reason you see flushes is because many people still enjoy going long (and short) with money (gold) they don't have. Look at the chart of this century and I don't think there is much reason to argue that anything has been capped.

      For the time being and until a crisis hits traditional portfolios don't expect a crazy performance, although it seems demand from Euro and Asian savers/retirees is good enough to keep it from falling for now. This will change if some day 60-40s are down 30% and gold is threatening 2k$ again as I do not see who the sellers of physical are going to be there. In theory cash should outperform gold in what would probably be a deflationary environment, but most on here I think are taking immediate debasement of currencies for granted in that scenario.

      What I really see gold as is the ultimate retirement asset for people who don't have the knowledge or mood to buy more sophisticated hard assets. Clearly Warren Buffett prefers rail lines, but if you are going to be watching telly for the next 20 years and just spending some money on food and energy why not use a commodity currency that has been correlated to your expenses for 3000 years? In the unlikely worst case scenario deflation kicks in and nothing is done about it you would have been better off holding cash/bonds but still shouldn't lose much purchasing power.

      That said, as someone under 30 I feel we need to be engaging in trying to find those real assets and equity with decent deflation/inflation protection that provide something to the world and hopefully give us at least some yield. Can't end without giving a huge thumbs up to Steve Diggle's videos on this topic, truly inspiring. And of course I still hold a big chunk of yellow rock as an option on everything, just so I can tell my neighbour and his 15 buy to lets on 10% equity I told you so.

  • AH

    Andrew H.

    9 10 2017 15:38

    1       0

    Meh. I will buy my 1-3% of net worth in physical gold in the next year or so. Will trade gold long and short above that. Nothing in this interview really changed my view, more focused on whether there will be another dollar spike to use as opportunity to buy. Was more confident of another dollar spike six months ago and fairly neutral today.

  • NI

    Nate I.

    9 10 2017 15:09

    8       0

    Always good to hear from Simon Mikhailovich. Hoping RV has him back for another full interview.

  • KS

    Kim S.

    9 10 2017 13:20

    11       0

    Great summary that the risk of not owning gold is greater than the risk of owning gold

  • JS

    John S.

    9 10 2017 11:07

    17       0

    Good but too short. Need to let these contributors expand on their thinking

    • TD

      Tom D.

      9 10 2017 13:34

      14       1

      Understood and appreciated, but I prefer the 30-minute format because we have only so much time each day...if further thought development is needed, bring on another 30 minutes sooner rather than later. Overall great info on a subject that interests me greatly, thanks.

    • MD

      Matt D.

      9 10 2017 14:21

      11       0

      "Part 1"

    • MJ

      Max J.

      9 10 2017 16:13

      2       0

      Yeah only part 1