Wall Street, they say, has finally caught up with Main Street. For years, the latter has been warning that all is not well with the American economy.
Consumers Felt it First
US consumers have been feeling stressed and stretched since inflation started rising in the Summer of 2020 impacting the price of groceries, clothing, housing, and even fast food. For consumers, $15 Big Macs and a dozen eggs approaching $5.00 — have become real-life symbols of economic hardship.1
The impact of inflation hits lower income households hardest, since they spend the bulk of their money on necessities. California’s Public Policy Institute examined the impact of rising prices on various income levels:
“Food prices are up 27% compared to April 2019, and gasoline is up 29%. While expenditures on these goods and services make up large portions of most household budgets, lower-income households spend almost all of their resources (83%) on food, housing, transportation (including gasoline), and health care. Middle-income families spend 75% on these necessities, and high-income families spend 64%. Inflation has hit lower income Californians hardest … the same set of necessities would cost low income households 22% more today than in 2018–19. By comparison, middle-income households would spend 20% more, and high-income households would pay 17.5% more.”
While prices have come down, the PPIC concludes that the prolonged period of severe inflation has left economic “scars,” particularly on families and households making less. In July, the Index of Consumer Sentiment, a consumer confidence survey published monthly by the University of Michigan, dropped 7.1% year over year. Similarly, the Current Index of Economic Conditions was down 18% year over year.2
Jobs Seekers Knew Months Ago
American jobseekers knew that jobs were getting harder to find and keep long before the weak June jobs report showed that the economy added just 114,000 new jobs far short of the projected 185,000. In addition, unemployment rose to a worrisome 4.3%. Employers are grappling with inflation, political uncertainty, and higher interest rates — while workers are confronting a cooling labor market, rising layoffs, the impact of AI, and growing economic uncertainty.
The report sent the financial markets into a tailspin and left some questioning whether the Fed has waited to long to cut rates as reported by the Wall Street Journal:
“In stocks, a broad-based selloff hammered the tech-heavy Nasdaq, which fell 2.4% and entered correction territory, down at least 10% from its recent high … For months, the economy seemed to be in a sweet spot, with inflation falling and growth humming along. Investors piled into the most economically sensitive corners of the market, wagering that the expansion had room to run. This week’s data has punctured some of those hopes and raised questions about whether the Federal Reserve has waited too long to trim interest rates … ‘Maybe things weren’t as rosy as we thought they were,’ said Eric Merlis, co-head of global markets at Citizens Financial Group.3
The pressure on Fed Chair Powell to cut rates has increased as the market turmoil continues and there has even been calls for emergency rate cuts sooner than September.
The Volatility Index Has Known for a While
The CBOE (Chicago Board Options Exchange) Volatility Index which measures the market’s expected volatility, started making noise last Fall. On Monday, it spiked to the highest level since the depths of the Covid-19 pandemic when the U.S. economy was in complete shutdown and at one point, it did something it has not done since the 2008 financial crisis.
“Earlier on Monday, the VIX was up 134% at 55, surpassing a 115% increase from Feb. 5, 2018, on a closing basis. On that day, the VIX more than doubled as several short-volatility exchange-traded products were forced to bid up VIX futures, sending a shudder through the broader market … For a brief period, the spread between the spot VIX and its second-month futures contract reached a deeply negative 30 points, exceeding its most recent lows reached during the depths of the COVID-19 selloff. On a closing basis, this would have been the widest level since October 2008.4
The VIX is a serious indicator that has been around for over three decades. It specifically tracks volatility in the S&P 500. According to Investopedia, “the VIX is calculated using a formula to derive expected volatility by averaging the weighted prices of out-of-the-money puts and calls.”5 The index reflects volatility expectations over the next 30 days and in that sense is a gauge of market risk. As a general rule, VIX readings below 20 indicate a low-risk environment while anything above 20 suggests a more volatile outlook.
Warren Buffet Knows All Too Well
Warren Buffett’s Berkshire Hathway has apparently sold over $75 billion in stocks to boost its cash reserves. The multinational conglomerate’s stock dump includes almost half of its shares of Apple worth about $20 billion and $3.8 billion worth of Bank of America. This has prompted Elon Musk to suggest that Buffett knows a correction is coming.
Buffet is famous for saying, “Be fearful when others are greedy, and be greedy when others are fearful” which suggests that he may be accruing billions in cash to pick up bargain buys in the event of a recession. The move should not go unnoticed and is a clear wake-up-call for what has been an expensive and irrationally exuberant market.
Bloomberg calls Buffett’s move a clear warning that harkens back to the financial crisis of 2007-2009:
“The Berkshire news comes at a point of particular vulnerability in markets and the economy. Together with excess savings and low unemployment, high asset prices — sustained in part by elevated US large-cap valuations — have been one of the three pillars of US consumption in recent years. Excess savings have been dwindling for some time, but personal wealth and the labor market seemed to be holding up well until last week. Now, suddenly, the consumption story feels unstable. Two days after the Federal Reserve forwent an opportunity to cut policy rates, a Bureau of Labor Statistics report Friday showed that the unemployment rate rose to a nearly three-year high, starting the selloff that Buffett helped continue.6
Buffett’s cash pile has not looked this flush since June of 2005, just 18 months before the start of the Great Recession. The current stock rout was driven by Friday’s disappointing jobs report and mounting U.S. recession fears which triggered a global selloff just weeks after indices reached record highs. Since the start of the month, the Dow has lost over 1645 points, the S&P 500 has lost almost 260 points, and the Nasdaq has lost over 987 points. Apple, Amazon, and Google all declined sharply as did Nvidia and Microsoft which also raises concerns about the overall viability of the AI market boom.
Wall Street Doesn’t Want You to Know
Wall street has many secrets — from hidden fees and market manipulation, to cooking the books, and shameless stock promotion. Back in 2002, Bloomberg touched upon some of these in an article entitled: “How Corrupt is Wall Street?”
“Wall Street has always struggled with conflicts of interest. Indeed, an investment bank is a business built on them. The same institution serves two masters: the companies for which it sells stock, issues bonds, or executes mergers; and the investors whom it advises. While companies want high prices for their newly issued stocks and low interest rates on their bonds, investors want low prices and high rates. In between, the bank gets fees from both and trades stocks and bonds on its own behalf as well, potentially putting its own interests at odds with those of all its customers.7
While Wall Street’s big investment banks are mum about these conflicts, they’re also quiet about the behavioral economists they use to influence trades.
“Behavioral economists used to be guardians of America’s 95 million Main Street investors, with an aura of integrity, professionals with a fiduciary responsibility. No more. They’re the investors’ enemy, working for Wall Street banks, for Washington politicians, operating in the shadows, like the NSA, developing tools and technologies to secretly control data, manipulate the brains of savers, voters, taxpayers, and investors.8
And that’s not all. New structured investments create a false sense of security as outlined by the Wall Street Journal earlier this year.
“It might seem strange that volatility is so low when inflation, monetary policy and geopolitical conflicts make the global economy more uncertain than ever. Here is the problem: Structured products might themselves be what is lowering it … the Bank for International Settlements pointed out that the banks selling all these notes have been forced to take the other side of their clients’ bets. To hedge the risk, trading desks have been leaning against swings in stocks, selling them when they go up and buying large drops—a practice known as delta hedging. This has pulled down long-term volatility.9
These structured products have created a feedback loop reminiscent of 2017 and 2018 which resulted in an eventual explosion of volatility and a subsequent equities free fall.
So, it seems that Wall Street insiders not only knew about the coming volatility, in many respects, they orchestrated it by inflating values and manipulating market sentiment to the point of meltdown.
Whether poaching fees from nest eggs, funneling public pension plans into private equity conglomerates, or ignoring economic data — investment banks often put savers, retirees, and everyday investors at great risk. Lest we forget, it was predatory lending and subprime interest-only loans that contributed to the 2008 financial crisis and the subsequent housing crash.
Gold is a Hedge for the Unknown
On September 23, 2007 the Sunday New York Times read: “Gold, Again, Becomes a Shield Against the Unknown”10 as it urged a return to gold just months before one of the worst financial meltdowns in American history. To the victor go the spoils and while so many lost so much — those who listened emerged from the Great Recession with a commodity that nearly doubled in value.
Gold performs well in the face of financial mayhem. It is a physical asset driven by supply and demand making it fairly invulnerable to manipulation by big banks and big government. It is considered a critical commodity to hold in times of crisis due to its liquidity and longstanding reputation as a store of value.
There’s a famous saying, “stocks take the stairs up and the elevator down.” Gold does neither. It is a safe haven investment whose value remains fairly stable providing critical diversification for portfolios confronting inflation, uncertainty, volatility, and the many things we simply do not know about — until it is far too late.
Call Thor Metals Group at 1-844-944-THOR for more information about acquiring gold.
A Study of Silver’s Supply Deficit amid Green Energy Demand
A Special Report on De-Dollarization and your Retirement
A Definitive Guide to the Benefits of a Precious Metals IRA
This has truly been gold’s “amazing year.” The precious metal continues to rally after hitting multiple all-time highs. Central banks and the world’s leading monetary authorities continue to stockpile gold bullion and investors have once again turned to gold’s safe haven properties as wars rage across Eastern Europe and the Middle East. The prospect of rate cuts has added to gold’s allure particularly as inflation wanes. And political uncertainty across the globe including the future of U.S. leadership presents yet another gold price trigger. If you have not yet made a move into gold, here are key reasons to do so before the election in November.
1) Market Concentration Risk
There is no denying that Wall Street’s market gains have been largely concentrated among just a handful of stocks.1
The infamous “Magnificent Seven” — Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla gained 107% in 2023, pushing the S&P 500 up 24%.2 All seven of these companies essentially belong to the same technology sector representing a degree of market concentration that is replete with risk. With fewer companies driving the market, an earnings shift or sector reversal increases the odds of a market correction.
The 10 largest U.S. companies accounted for just 14% of the S&P 500 stock index a decade ago. Today, they account for more than 27%, nearly double. According to Morgan Stanley, the pace of market concentration is the most rapid since 1950, giving just a handful of companies with overlapping business models undue influence on investment portfolios.3
Gold is a Powerful Stock Market Hedge
2) The New Real Estate Crisis
Real Estate in America currently sits at the lowest affordability levels since the 1980s. According to U.S. News & World Report, millions of homeowners are experiencing “golden handcuffs” as they locked in very low, pandemic era fixed-rate mortgages prior to rates skyrocketing giving them little incentive to sell:
“In the past, when mortgage rates rose, home prices would decline to maintain affordability. Today, however, with so many existing homeowners locked into their existing low mortgage rates of 4% to 5% or below, there have not been sufficient incentives to move elsewhere, keeping home inventory low and prices high – for now.”
According to US Census Data, homebuyers are spending more than double to buy a home in 2024 as opposed to back in 1965 when a home cost about $202,000 — less than half of the over $420,000 it costs today when adjusted for inflation.4
Long-time investment strategist, Chris Vermeulen of The Technical Traders, believes the property market is due for a significant correction and both commercial and residential properties could plunge as much as 30%.
“People are going to have to start to sell their homes. What we’re starting to see is people starting to realize they can’t afford their mortgages, or they need to downgrade. A lot of people are struggling financially, and this is really the tip of the iceberg. Give it another two or three years — that’s when the realestate market gets hit the most.”5
Gold Hit Record Highs During the 2008 Subprime Real Estate Crisis
3) The Trump Tariffs
If he prevails in the 2024 Presidential Election, Donald Trump has made no secret of his intention to take a tougher stance on America’s trading partners. He has proposed an acrossthe-board 10% tariff on all imported goods and floated a 60% tariff on all Chinese imports.
“I’m a big believer in tariffs,” the former President proclaimed in March. “I fully believe in them economically when you’re being taken advantage of by other countries. Beyond the economics, it gives you power in dealing with other countries.”6
Some experts worry, however, that the Trump Tariffs could prove economically disruptive and even inflationary. German technology group Heraeus, one of the world’s largest refiners of precious metals points out that Trump last trade war with China from 2018-2020, coincided with dramatically rising gold prices.
“The US-China trade war between 2018 and 2020 coincided with a rising gold price. Gold surged during this period as the prolonged negotiations, coupled with tariff and geopolitical escalations, drove investors to seek gold as a safehaven asset despite a rate-hiking environment until mid-2019. Gold’s appreciation closely correlated with the tariff increases which served as a meaningful indicator of US China tensions.” 7
Trump’s Return to the White House Could Drive Investors to Gold
4) Fed Rate Cuts
The latest Consumer Price Index for June, indicates that inflation fell 0.1% from May, marking the first monthly decline in prices since May of 2020. Prior to this reading, Fed Chair Jerome Powell had already indicated that inflation doesn’t need to be below 2% for the Fed to cut rates.
“You don’t want to wait until inflation gets all the way down to 2%. If you waited that long you probably waited too long because inflation will be moving downward and would go well below 2%, which we don’t want.”8
According to the Wall Street Journal, Powell made an even more important shift toward lower rates when he expressed concern about the US labor market during his Senate Banking Committee testimony on June 9th.
“Elevated inflation is not the only risk we face. We’ve seen that the labor market has cooled really significantly across so many measures.”9
The June jobs report showed employers adding 206,000 jobs, down from 218,000 in May. In addition, the unemployment rate tick up to 4.1%, the highest level since late 2021. The latest inflation readings and soft jobs data have significantly raised the odds that the Fed will start cutting rates in September and continue to do so in subsequent meetings.
Gold has Historically Delivered Positive Returns during Rate Cut Cycles
5) An Imminent Economic Downturn
There are a host of financial experts now expressing concern about a looming economic crisis driven by a number of factors including a cooling labor market, rising unemployment, slowing GDP growth, geopolitical fragility, skyrocketing consumer debt, decreased consumer spending, a real estate crash and a sharp downturn in U.S. business investment.
Economist David Rosenberg believes there is an 85% chance that the U.S. economy will enter a recession this year based on models from the National Bureau of Economic Research including financial conditions indexes, the debtservice ratio, foreign term spreads, and the level of the yield curve. Rosenberg says the recession model is displaying the highest probability since the financial crisis of 2008. 10
Peter Berezin, chief global strategist at BCA Research, recently predicted that a recession will hit the US economy later this year or in early 2025 accompanied by a 32% stock crash. 11
Data platform Statista is projecting an almost 52% probability that the U.S. will fall into an economic recession in less than a year or by May of 2025. 12
And top economist and founder of the Economic Cycle Research Institute, Lakshman Achuthan, also believe the US economy is flashing a recession warning based on a model that has only shown a false positive once in the last century. The ECRI’s Cyclical Labor Conditions index has plunged nearly 50%. That steep decline mirrors falls seen prior to the 2001, 2008, and pandemic-era recession. 13
Gold has Proven to be a Reliable Safe Haven during Economic Crisis
A Gold IRA is much like it sounds, an individual retirement account that expressly allows individuals to hold approved precious metals like gold and simultaneously reap key benefits that the IRS has carved out for traditional retirement arrangements: “IRAs allow you to make tax-deferred investments to provide financial security when you retire.”1 The Gold IRA, however, is a special type of retirement account that permits a wider selection of assets, and for many this not only provides greater control — but the protection of a more diversified portfolio.
The Power of Choice
To put gold into an IRA, you must set up a Self-Directed Individual Retirement Account (SDIRA). Investopedia defines this type of account as follows:
“A self-directed individual retirement account (SDIRA) is a type of individual retirement account (IRA) that can hold various alternative investments normally prohibited from regular IRAs. Although a custodian or trustee administers the account, it’s directly managed by the account holder, which is why it’s called self-directed.”2
SDIRA’s are available either in the form of traditional IRAs where your money grows tax deferred or as a Roth IRA where you contribute after tax dollars and your money grows tax free. This type of account permits account holders to invest in alternative assets like gold and other approved precious metals but also cryptocurrencies, private equity, real estate, and even promissory notes.
According to financial counseling group Ramsey Solutions, “the self directed IRA … gives investors the power of choice… whether it’s having a closet full of different wardrobes or dozens of flavors to choose from at your favorite ice cream shop, we like having options.”3
Gold is a Self-Directed IRA Favorite
Gold is one of the more popular alternative assets held in an SDIRA. A Gold IRA combines the powerful and timeless benefits of gold with the tax and savings advantages of an IRS approved retirement account.
Gold is widely considered to an effective inflation hedge. It also tends to have an inverse relationship with the dollar and dollar-dominated investments like stocks and bonds. This means when the markets or the dollar fall, gold tends to rise and/or maintain its value. This characteristic has given it a reputation as crisis insurance and the go-to asset during times of economic volatility.
The Economic Observatory, an academic research and policy institute, recently summed up gold’s safe haven benefits as follows:
“The value of gold is stable. It provides protection from inflation; it can diversify investors’ portfolios; and it is typically resilient to financial and economic crises. There has always been strong demand for gold. These characteristics make gold a safe asset. Indeed, fueled by geopolitical unrest and higher inflation around the world, gold prices have recently reached an all-time high.”4
The world central banks all hold gold and set gold buying records in 2023 as well as in the first quarter of 2024. The world’s leading monetary authorities buy gold for the same reason private investors do — to mitigate investment risk, to diversify their assets and as a hedge against global economic chaos.
How to Set-up a Gold IRA
There are essentially three main steps to setting up a Gold IRA.
The first step is to choose a custodian for your metals. A precious metals custodian is an IRS-approved institution that specializes in safe guarding and securing alternative assets. According to Investopedia, custodians can manage customers’ accounts, the settlement of financial transactions, report on the status of assets, and ensure compliance with tax regulations. 5
The next step is to fund your account. According to online education resource, LendEDU, there several ways of doing this. The first is with cash, payable by check or wire. The second is to rollover funds by withdrawing them from an existing traditional IRA or 401(k) and then depositing them (within 60 days) into your new self-directed IRA. The third option is to do a direct transfer (with no cash taken out) from your current IRA directly into your new gold IRA account. 6
The last step is to select your portfolio of metals. In the case of gold, you must hold only IRS approved gold bars, rounds, and coins. According to custodian Strata Trust Company, the gold must be:
99.5% pure.
Produced by a manufacturer certified by NYMEX, COMEX, NYSE/Liffe, LME, LBMA, LPPM, TOCOM, ISO 9000 or a national government mint.
Proof coins must be in excellent condition, in original mint packaging, and include a certificate of authenticity.
Small bullion bars must be manufactured to precise weight specification.
Non-proof coins must be in brilliant and in uncirculated condition.
Some examples of IRS approved coins that may be included in a Gold IRA are: American Eagle bullion and proof coins, Canadian Maple Leaf coins, Chinese Panda coins, and British Britannia coins (2013 and newer).7
A Gold Backed Retirement
Holding physical gold in a retirement account provides key benefits critical to preserving and protecting wealth. Gold’s time-tested attributes can help combat the mounting threats posed by inflation, federal debt, political polarization, fed policy, and the fallout of global wars. Above all, a gold backed retirement provides peace of mind by virtue of its design and its inherent benefits which include:
1) Portfolio Balance via Strategic Asset Diversification 2) The Tax Advantages of an IRS-approved Account 3) A Hedge Against Inflation and/or Economic Uncertainty 4) Chaos Insurance in the event of a Financial Downturn 5) The Peace of Mind of tangible Asset Ownership
Gold has long been heralded for preserving purchasing power and wealth and this is rooted in both history and long-term market data as outlined by State Street Advisors:
“Gold has demonstrated a low and negative historical correlation to many financial indices over time, potentially helping to smooth out volatility and preserve wealth. For example, gold has shown a 0.01 and 0.09 monthly correlation to the S&P 500 Index and Bloomberg US Aggregate Bond Index, respectively, since the 1970s. 1 This persistent and historically low correlation to many other financial assets is rooted in gold’s diverse sources of demand — both cyclical and countercyclical — which is illustrated during different phases of a full economic cycle.”8
Diversifying with precious metals via an Individual Retirement Account wasn’t always an option in America. When the IRA was established back in 1974 by virtue of the Employee Retirement Income Security Act (ERISA), precious metals were not allowed. But in 1997, Congress passed the Taxpayer Relief Act which changed the rules of self-directed IRAs and in Title III: Savings and Investment Incentives, Section 304, it states: “Permits the investment of IRA assets in certain bullion.”1
The legislation specifically permits self-directed IRAs to hold certain precious metals including gold, silver, platinum, and palladium classified as investments as opposed to collectibles. The distinction between “investments” and “collectibles” is particularly important and constitutes an exception to existing Tax Code.
The accounting firm PKF Mueller describes the exception as follows:
“As a general rule, an IRA investment in any metal or coin counts as the acquisition of a collectible item … In effect, this general rule prohibits IRAs from investing in precious metals or coins made from precious metals. However, the Tax Code supplies an important statutory exception: IRAs can invest in 1) certain gold, silver, and platinum coins and 2) gold, silver, platinum, and palladium bullion that meets applicable purity standards. However, the coins or bullion must be held by the IRA trustee or custodian rather than by the IRA owner. These rules apply equally to traditional IRAs, Roth IRAs, SEP accounts and SIMPLE-IRAs.”2
So, what are the “purity standards” and “certain” coins that constitute the statuary exceptions referenced above? To be eligible for investment in an IRA — gold, platinum, and palladium must be 99.5% pure and silver must be 99.9% pure meaning that only the remaining .5% and .1% can be an alloy (or a combination of other metals).
Online financial educator LendEDU outlines the other minimum fineness requirements as follows3:
Coins:
Proof coins must be encapsulated, in mint condition, and require a certificate of authenticity.
Non-proof coins must be brilliant and uncirculated.
Bars and Rounds:
Must be produced by an accredited/certified source or a national government mint and meet fineness requirements.
Small bullion bars must be manufactured to exact weight specifications.
Here are some popular IRA-approved precious metals:
GOLD
American Eagle Bullion and Proof Coins
Canadian Maple Leaf Coins
Chinese Panda Coins
Credit Suisse Pamp Bars
Austrian Philharmonic Bullion Coins
SILVER
American Eagle Bullion and Proof Coins
Canadian Maple Leaf Coins
Chinese Panda Coins
Australian Kookaburra Coins
Mexican Libertad Bullion Coins
PLATINUM
American Eagle Bullion and Proof Coins
Australian Koala Bullion Coins
Canadian Maple Leaf Coins
Isle of Man Noble Bullion Coins
PALLADIUM
American Eagle Bullion and Proof Coins
Canadian Maple Leaf Coins
Russian Ballerina Coins
1 ounce Palladium Bar
Three, Key Benefits of holding Gold and other Approved Metals in an IRA
Diversification – When held as part of a self-directed Individual Retirement Account, precious metals can help reduce portfolio volatility since they tend to be negatively correlated to paper assets like stocks and bonds. Negative correction means that precious metals tend to either increase in value or maintain their value when weakness or volatility strikes Wall Street, the bond market, and the U.S. dollar.
Tax Deferred Growth – Precious metals placed in a pre-tax IRA enjoy the same tax benefits as a standard IRA, meaning contributions are often tax deductible (in the year they are made) effectively reducing taxable income. In addition, precious metals IRAs appreciate tax deferred until the time of withdrawal. In the case of a qualified Roth Precious Metals IRA, gains are tax-free.
Store of Value – Gold has long been considered a store of value meaning it retains its value over the long term. Traditional assets held in an IRA tend to rise and fall over time, sometimes quite dramatically. Gold, however, has intrinsic value due to its rarity, supply and demand factors, its acquisition by central banks, and its longstanding historical significance.
At a recent US News Investment Experts Roundtable, financial consultant Julie Pinkerton, (CLU, ChFC, LUTCF), stated the following about gold’s appeal in particular:
“Many gold enthusiasts still remember the 1970s, a trifecta of recession, double-digit inflation and soaring oil prices. Long lines at the gas station are etched into their memories. As an investment, gold performs best when conditions are at their worst. Now, it’s easy to pick up any newspaper, watch any TV or hear one’s tech device chime with another notification of current turmoil – multiple global wars and instability, persistently elevated inflation, social unrest on college campuses and political upheaval in a contentious election year. For many, physical gold can be comforting. They can see it, touch it and have a general idea of how it will behave as an investment in these circumstances.” 4
Suffice to say whether you decide to put American Eagle gold bullion coins or pure palladium bars into a precious metals IRA, doing so will help reduce your portfolio risk, protect your retirement dollars, hedge against inflationary forces, and add a critical layer of safety to your accumulated wealth.
While gold has been grabbing world headlines as it has set repeated price records, silver has quietly rallied to an 11-year high, shattering the $30/oz mark this month. It is one of the year’s best performing commodities and yet in relative terms, silver is cheap. It currently takes about 80 ounces of silver to buy 1 ounce of gold, compared with the 20-year average of 68.1
Silver’s story is steeped in history as the jewelry, food vessels, objets d’art, and coins of the ancients were all made from silver.
But it is also a metal with one foot firmly in modernity as a highly conductive catalyst that plays a critical role in the green revolution and the global transition to clean energy.
According to the U.S. Geological Survey, “of all the metals, pure silver has the whitest color, the highest optical reflectivity, and the highest thermal and electrical conductivity.”2
Could Silver Double or Even Triple?
Silver’s latest price forecasts range from $34-$35/oz to as high as $50/oz with some outlier predictions for a price surge of up to $100/oz based on rising industrial demand, growing supply deficits, and limited above ground stock. From 2021 to 2023, the Silver Institute estimates there was a cumulative deficit of 474 million ounces of silver, equivalent to 14,743 tons of the white metal.
According to MarketWatch
“Forecasts pointing to a fourth straight yearly deficit in global supplies and a rise in demand to its second-highest level on record raise the potential for silver prices to rally, and even roughly double before the end of 2024.”3
Supply Challenges Keep Silver Undervalued
Most experts consider silver to be grossly undervalued based upon inherent and uncorrectable supply deficits. As mentioned, silver demand has outpaced supply for the past three years, and according to commodities research group CPM, silver supply is currently in a structural decline that cannot easily be reversed.
“The main issue is the deterioration in mine production, although scrap sources are falling as well. This is important because much of the bullion you and I buy comes from newly-mined silver. Secondary sales (bullion products that have been previously bought and sold) will always have a place in the industry, but to be prepared … mine production will need to be healthy and rising. It is neither of those things.”4
It’s important to remember that silver is rarely found in its pure form and excavating silver from the earth is a complex process of extracting and sifting mineral-rich rock and sediment (ore) via open pits and deep underground mines. Silver-bearing ores like copper, lead and zinc must then be crushed, ground, separated and chemically processed to derive pure silver.
This inherently arduous, expensive, and often inefficient process will only become more taxing since most of the silver that’s easiest to mine has already been reached. So, amid the greatest demand pressure in history, silver reserves are dwindling and that should drive silver prices higher well into the foreseeable future.
Investing News recently summarized the silver supply and demand challenges as follows:
“The thinning inventories that contributed to silver’s price gains through Q1 have been driven by the white metal’s increasing demand from industrial sectors. The biggest contributing sectors have come from the energy transition, particularly the production of photovoltaics and electric vehicles.”5
The Unstoppable Solar Army
So where does silver go from here? In terms of green energy needs, demand looks elevated well into the end of the decade. Solar energy continues to boom, particularly in the U.S. The Solar Energy Industries Association predicts nothing but silver rooftops and sunshine ahead.
“The total US solar fleet is expected to quadruple over the next decade to 673 GW, as the Inflation Reduction Act provides key tax incentives and long-term certainty that will spark demand for solar and storage and accelerate the transition to renewable energy.”6
Breaking Price Barriers and Resistance Levels
Andrew Addison of Barron’s who has been charting silver’s price barriers, resistance levels and upsides for years, believes silver is ready for a dramatic breakout. “Once silver has a monthly close above $31, then my work would confirm upside projections to $45-$55.”7
He’s not alone. FX Empire recently stated that, “historically speaking, once we get above the $30 level, it [silver] is a market that tends to just take off to the upside.” And Forbes Advisor Benjamin Curry offers this advice, “It makes sense to invest in silver under certain market conditions. When supply and demand are out of balance is the right time to invest in silver.”
And with silver supply critically constrained and silver demand being inexhaustibly driven by expanding 5G networks, photovoltaics, and consumer electronics — the right time to buy appears to be right now.
AI Demand and Beyond
Global silver demand is expected to reach 1.2 billion ounces this year, the second highest level in recorded history, and there seems no end in sight for silver’s role in industry, manufacturing, renewable energy and beyond.
According to the Silver Institute’s April 2024 Newsletter, “Silver has many exciting new demand opportunities beyond its traditional applications and expanding role in the energy transition. For example, silver will become an indispensable material as artificial intelligence (AI) rises. End uses expected to incorporate silver in AI include transportation, nanotechnology, biotechnology, healthcare, consumer wearables, computing, and energy in data centers.”8
Contact Thor Metals Group at 844-944-THOR for information on Investment-Grade Silver
It is the 79th element on the Periodic Table, and it has existed for hundreds of millions of years. It was formed in the stars when giant supernovas came together in monstrously powerful collisions. 1
Gold is plentiful at the earth’s molten hot core, or what National Geographic calls a “furnace of the geothermal gradient”2 but rare in the more accessible crust of our planet. According to researchers at the University of Bristol, the gold reserves we can reach were likely the result of a “bombardment of meteorites more than 200 million years after Earth was formed.” 3
The National Mining Association charts gold’s use in culture, fashion, and adornment as far back as 4000 B.C. It cites Nubia, a gold-rich region along the Nile River in Egypt, as the first to use gold as a medium of exchange and trade in 1500 B.C.4 The rest is history, so to speak, as gold remained a store of value and payment system throughout antiquity.
Gold coinage was the centerpiece of the British financial system dating from the mid-17th century, while the international (classical) gold standard dates from 1870 to the outbreak of World War I. Great Britain officially ended the gold standard in 1931 followed by the United States in 1933, although after the Second World War, the U.S. dollar remained pegged to gold until 1973.
With this Rich History, Why Do So Few Americans own Gold?
Clearly gold has not been hiding, but it has been hidden from you. A recent Gallup poll confirms that 61% of Americans now own stock5. One in four Americans own bitcoin6 and 66% of Americans own a home,7 but how many Americans own physical gold? An LA Times op-ed estimates gold ownership in the U.S. to be between 2.5M and 25M or a paltry .75% to 7.5% of the current U.S. population. Actual gold ownership, they say, is shrouded in a long-standing “legacy of secrecy.”
“We have probably never known how many Americans owned gold. For most of America’s history, that question has either been close to irrelevant (through the 19th century, the vast majority of Americans could not afford to invest in any assets beyond those that kept them alive) or a non sequitur (from 1933 to 1975, it was not legal for Americans to own gold as an investment).”8
Part of the answer may be by design since gold is a private investment and while there are federal reporting requirements many consider gold to be an untraceable store of wealth. And while those who have it may not be talking, those who don’t have it — may not know how to get it.
Gold is universally considered to be a good long-term investment but acquiring physical gold is neither encouraged nor embraced by the financial community. Why is that?
First, many financial advisors are not familiar with the process of acquiring physical gold. Second, they’re not incentivized to sell precious metals unlike trading equities or managing a stock portfolio. And finally, for many wealth advisors, stock brokers and fiduciaries — holding gold simply falls outside of their wheelhouse. And this is a disservice to the millions of savers and retirees who could benefit from gold’s portfolio preserving qualities.
Paper Floats
Those who are not privy to gold’s enduring value are missing out on the most powerful element of its monetary appeal. While the Bretton Woods system firmly pegged the dollar to gold, soaring inflation and an impending gold run triggered “Nixon Shock” in 1971 which uncoupled the dollar from the precious metal, and created an unbacked, government issued fiat currency. Allowing the value of paper dollars to “float” and the US Treasury to continue to print, create, or digitally emulate money was a recipe for disaster from the start.
Simply stated, money printing leads to inflation and unsustainable debt. This not only weakens the buying power of currency, it undermines the value of the money you already have tucked away in the bank, a 401k, or a pension plan.
A recent warning from the Cato Institute states,
Rising US spending and debt in light of heightened political polarization and congressional budgetary gridlock raise concerns about the sustainability of government finances. The recent credit downgrade by Fitch Ratings and Moody’s Investors Service lowering its outlook on the US credit rating is a reflection of the nation’s concerning long‐term fiscal trajectory and poor fiscal governance. Without a political willingness to reduce the growth in old age benefit programs, the erosion of central bank independence to finance future spending represents a growing risk. 9
Suffice to say, holding dollars or paper money is fraught with uncertainty. This directly contrasts with the legacy of wealth, prosperity, and intrinsic value of gold.
There is no other modern investment that is embraced by central banks and the world’s leading monetary authorities to diversify reserves, protect against currency depreciation, provide a global inflation hedge, and defend monetary holdings against global conflict and civil unrest.
Tinderbox Times
Welcome to the here and now where geopolitical risk responds to gold and gold responds to geopolitical risk. For the first time in generations, war has returned to the Middle East and the European continent. Armed conflicts, trade wars, demonstrations, and political polarization now dominate the news cycle. This has increased demand for gold, particularly from the world’s central banks.
According to ING, the Dutch multinational banking and financial services corporation, central bank buying has fueled gold’s recent record-setting run and they expect that rally to continue.
“Gold has … been supported by strong central bank buying as reserve diversification and geopolitical concerns have pushed them to increase their allocation towards safe assets.”10
According to the World Gold Council, owning gold in 2024 is as compelling as ever in a world mired in volatility and calamity.
“Last year central banks placed great emphasis on gold’s value in crisis response, diversification attributes and store-of-value credentials. A few months into 2024 the world seems no less uncertain meaning those reasons for owning gold are as relevant as ever.”11
The world is clearly “no less uncertain.” As we entered the new year, The World Economic Forum cited “cracks in society” and “episodic upheaval.”12 The Carnegie Endowment for International Peace, which compiles a Global Protest Tracker, is now monitoring over 700 significant anti-government protests worldwide.13
According to Reuters, the number of American “preppers,” or those who believe in preparing for societal chaos has doubled in size since 2017 and now stands at some 20 million. And they’re a far more culturally diverse group than ever before in history. According to John Ramsey, a former Obama administration advisor, “The only real unifying denominator among preppers these days is people who are smart enough to be aware of what the world is like … and they have the gumption to do something about it.”14
With unfolding regional conflicts, intensifying wars, growing protests, political division, and increasing unrest at home and abroad, we’re in uncharted waters. And, there’s little doubt that gold is where the world turns for safety.
In Plain Sight
To many, however, gold is still a “secret investment,” a gleaming enigma shrouded in obscurity; but it is one that has been integral to the history of money and is well known to central banks, leading monetary authorities, and emerging markets like China, Poland, Turkey, and India.
According to the World Atlas, the amount of “siderophile elements” in the earth’s core could cover us “knee-deep” in gold.15 But since it’s estimated to be about 6,000 degrees, significantly hotter than the surface of the sun, any “Journey to the Center of the Earth” is solely reserved for in the world of fiction.
The fact that we can readily purchase pure gold minted coins and seamlessly transfer 99.5% pure gold into an IRS approved retirement account, seems to be a bit of a modern-day wonder. And it’s something that is very much “in plain sight” for the world’s millionaires, billionaires and overly well-to-do.
According to mining and metals analyst John McDonald,
“The world’s wealthiest rely not just on the value of this yellow metal, but also on its staying power. No matter what happens on a global scale, gold will hold its perceived worth and act as a reliably appreciating asset over the long term.” 16
Indeed, much has happened “on a global scale” throughout the course of our lives. Few of us came through the double-dip recession of the 1980’s, the fallout of the dot.com bubble, the Great Recession, or the Covid-19 shutdowns and lockdowns — unscathed.
Subsequently, millions of Americans turned to gold as a crisis hedge and a long-term store of value.
To quote French novelist, poet, and author of Journey to the Center of the Earth, “It is only when you suffer that you truly understand.”
Thor Metals Group has been helping Americans acquire gold for over 18 years, facilitating some $40 million in precious metals purchases. We want to help you protect your portfolio from the growing risks at home and abroad.
Reach out to receive our FREE GUIDE — and to set up a very “PRIVATE” consultation.
Gold, the lustrous metal that has captivated humanity for millennia, has held a mysterious allure throughout history. From ancient civilizations to modern times, gold has been revered for its rarity, beauty, and intrinsic value. Yet, despite its enduring presence, investing in gold remains a foreign concept to many individuals. This paradox begs the question: why?
The answer lies in a complex web of factors, including the deliberate obfuscation of information by the banking industry, which perceives gold as a formidable competitor.
By controlling the narrative around investing, traditional financial institutions have perpetuated a culture of ignorance regarding the benefits and mechanics of gold investment.
This has served the banking industry well as it stands to reap no profits from an individual’s investment in gold. In fact, quite the contrary. It stands to lose billions of dollars that would otherwise be deposited into their institutions and loaned out at a healthy interest rate several times over.
In this landscape of misinformation, individuals are left vulnerable to exploitative practices and miss out on the potential wealth preservation and growth offered by gold.
Enter Brandon Thor, a visionary figure in the gold industry who is spearheading a movement to disrupt this status quo. As the founder and CEO of Thor Metals Group, Brandon Thor is on a mission to democratize access to accurate information on gold investment and empower the investing public to make informed decisions.
Brandon Thor’s journey to becoming a leading authority in the gold industry is marked by his storied career in investment banking and his tenure as a precious metals industry executive. Armed with an insider’s perspective on how the industry operates, Thor recognized the need for transparency and education to combat the pervasive misinformation surrounding gold investment. Through Thor Metals Group, he aims to fill this void by providing comprehensive resources and guidance to investors at every level of expertise.
At the heart of Thor Metals Group’s mission is the belief that everyone should have the opportunity to benefit from the unique properties of gold as a store of value and hedge against economic uncertainty. Through educational initiatives, insightful analysis, and personalized support, Thor Metals Group empowers individuals to navigate the complexities of gold investment with confidence.
One of the key challenges facing prospective gold investors is the lack of accessible information and reliable guidance. The banking industry, with its vested interest in promoting traditional investment vehicles, often downplays the role of gold in a diversified portfolio. By controlling the flow of information, financial institutions maintain their dominance and discourage individuals from exploring alternative avenues such as gold.
Thor Metals Group aims to dismantle these barriers by providing unbiased insights and cutting-edge research on gold investment. Through its online platform, investors gain access to a wealth of resources, including market analysis, historical data, and expert commentary. By equipping individuals with the knowledge they need to make informed decisions, Thor Metals Group empowers them to take control of their financial future.
In addition to education, Thor Metals Group is committed to promoting ethical practices within the gold industry. Brandon Thor’s firsthand experience has exposed him to the exploitative tactics employed by some industry players, and he is determined to protect investors from falling victim to these practices. By adhering to strict ethical standards and advocating for transparency, Thor Metals Group sets a new standard for integrity in the gold industry.
In conclusion, gold may have existed for thousands of years, but its potential as an investment remains largely untapped by the masses. The banking industry’s reluctance to promote gold investment has contributed to this disparity, leaving many individuals in the dark about its benefits. Brandon Thor and Thor Metals Group are on a mission to change this narrative by providing accessible, reliable information and empowering individuals to harness the power of gold for their financial well-being. As the world continues to navigate uncertain economic waters, gold stands as a beacon of stability and security—and thanks to Thor Metals Group, more investors than ever are poised to benefit from its timeless allure.
For more information on Brandon Thor and Thor Metals Group, check out www.thormetalsgroup.com or book an appointment to talk to one of their metals experts by calling 866-801-8467.
