Will Precious Metals Investors Get the Last Laugh? / Commodities / Gold and Silver 2021

Financialmarkets have become a complete joke. From GameStop to Dogecoin to non-fungible tokens(NFTs), a plethora of assets have been pushed to laughable heights with thehelp of the Federal Reserve’s funny money.

Justabout everyone, except for stone-faced Fed officials, seems to be in on thejoke.

Dogecoinpromoter and billionaire Tesla founder Elon Musk poked fun at cryptocurrencies and the U.S. dollar itself during hishosting duties last weekend on Saturday Night Live.

Duringthe “Weekend Update” segment, Musk appeared in character as a cryptocurrencyguru. He admitted Dogecoin began as a joke.

“Whatis Dogecoin?” Musk was repeatedly asked. The punchline was that any answer hegave failed to explain what it actually is.

Whateverit is, Dogecoin climbed to over $80 billion in value after a crazy 130-foldrise this year ahead of Musk’s SNL gig.

“It'sa hustle,” Musk finally confessed, after quipping that Dogecoin is “about asreal” as the U.S. dollar.

Hehas a point. Neither dollars nor Dogecoins have any tangible backing. Theirvalue is essentially made up.

Musk’sSNL bit caused the Dogecoin market to swing wildly, with the cryptocurrencysuffering a Saturday night mini-crash. So far, it hasn’t fully recovered fromit.

Whywould anyone put serious money into a joke of a cryptocurrency that literallymoves based on comedy sketches?

Speculatorsare free to speculate on anything for any reason, of course. But they should beaware that what they are speculating on lacks even scarcity value. There arecurrently over 120 billion Dogecoin units in circulation and, unlike withBitcoin, that supply is set to expand in perpetuity.

Investorswho view protecting themselves from inflation as no laughing matter are buyingassets with more solid fundamentals.

Physicalprecious metals represent sound money – the ultimate alternative to digital andfiat profusions.

Theunprecedented amount of spending and borrowing being carried out by the JoeBiden administration will require the Fed to keep purchasing Treasurysecurities with trillions of newly created dollars.

Sillyseason in Washington is whenever Congress is in session. And with fiscalresponsibility out the window, monetary policy will be on full blast for theforeseeable future.

FederalReserve’s dual mandate is to pursue full employment and stable prices. If youbelieve the Fed’s stated policy objective of raising the official inflationrate above 2% for an extended period fits the definition of price stability,then the joke’s on you!

OnWednesday, the Labor Department reported that the Consumer Price Index rose ahigher than expected 4.2% from the prior year. The CPI in April accelerated atits fastest pace in more than 12 years.

Thenon Thursday, the Producer Price Index came in hotter than expected – showing ayear-over- year surge in industrial costs of 6.2%. That’s the largest increasesince the Bureau of Labor Statistics began tracking the data set in 2010.

Fedofficials insist these price spikes are transitory and don’t yet warrant anymonetary tightening.

Bythe time inflation becomes so big of a problem that central bankers can’t denyit anymore, it may be too late for investors to exit vulnerable assets andobtain inflation protection – at least not at prices that are as favorable ascan be had today.

Goldand silver remain cheap relative tothe stock market and the exploding U.S. currency supply. Although gold bugs areoften subjected to ridicule by the Wall Street-centric financial media, what’struly ridiculous is some of the valuations attached to stocks and cryptocurrencies.

Inthis current clown world, Woke corporations are abdicating their fiduciary dutyto shareholders in order to pursue social activism.

Fastfood and beverage companies have taken it upon themselves to tell states whattheir voting laws should be. They have taken it upon themselves to tell theircustomers what they should think about racial controversies and what standstheir investors should take on sexual identity issues.

RonaldMcDonald used to represent a company that existed to sell burgers and fries.Now McDonald’s sells “modern and progressive” politics with its junk food.

Blue-chipbrands are so flush with cash, they apparently feel they can afford to ramp uptheir social activism rather focus on cutting costs. But the post-COVID boomtimes will eventually go bust – and perhaps much of the financial sillinessenabled by “free” money from Washington will go away as well.

Whenstocks roll over into their next bear market and some of the over-hyped digitalassets fail to provide safe haven, holders of precious metals may get the lastlaugh.

Stefan Gleason isPresident of Money Metals Exchange, the national precious metals company named 2015"Dealer of the Year" in the United States by an independent globalratings group. A graduate of the University of Florida, Gleason is a seasonedbusiness leader, investor, political strategist, and grassroots activist.Gleason has frequently appeared on national television networks such as CNN, FoxNews,and CNBC, and his writings have appeared in hundreds of publications such asthe Wall Street Journal, Detroit News, Washington Times, and National Review.

© 2021 Stefan Gleason - All Rights Reserved

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