A seventh big name investor recently began singing the praises of gold. Read on to see why and how to follow his lead. Plus a chance to learn how to select gold stocks that may seriously outperform gold itself…
By Justin Spittler
Today is a very special day at Casey Research.
After 40 years in the gold market, Casey Research founder Doug Casey is doing something he’s never done before.
For the first time, Doug is stepping forward and sharing the method he’s personally used to make millions of dollars in gold stocks.
Doug has used this method to make huge profits during every gold bull market in the last 40 years. During periods of rising gold prices, he’s used his “Casey Method” to book gains of 487%, 711%, and even 4,329% in gold stocks.
Those kind of numbers might seem impossible to achieve. But the fact is, with gold surging right now, similar money-making opportunities are staring us in the face.
And today, Doug is willing to share his gold stock secrets with you.
Now, let’s get into why gold should soar in the coming years…
• The world’s greatest investors are piling into gold…
On Tuesday, we told you Jeffrey Gundlach, Stan Druckenmiller, George Soros, and David Einhorn have placed huge bets on gold. Legendary investors Carl Icahn and Paul Singer also have reported big stakes in gold.
These are some of the most respected investors on the planet.
These “living legends” didn’t get to where they’re at by investing like everyone else. They made billions by going against the grain. You almost never see them all doing the same thing. But that’s exactly what’s happening right now.
Many of the world’s top investors are loading up on gold.
• Yesterday, Bill Gross went on record and said he too likes gold a lot…
You’ve probably heard of Gross. In 1971, he founded the investment firm PIMCO. Under his watch, PIMCO grew into the world’s biggest bond manager. Today, Gross runs his own fund at Janus Capital, where he manages about $1.5 billion.
In his latest monthly investment newsletter, Gross said gold is a much better bet than stocks or bonds:
I don’t like bonds; I don’t like most stocks; I don’t like private equity. Real assets such as land, gold and tangible plant and equipment at a discount are favored asset categories.
• Gross likes gold for the same reasons we do…
He’s worried about the weak global economy. He thinks the global financial system is incredibly fragile. And he says stocks and bonds “pose too much risk for little return.”
Bloomberg Business reported yesterday:
“Sovereign bond yields at record lows aren’t worth the risk and are therefore not top of my shopping list right now; it’s too risky,” Gross said in a statement released Tuesday by Old Mutual Global Investors. “Low yields mean bonds are especially vulnerable because a small increase can bring a large decline in price.”
Regular readers know what Gross is talking about. For months, we’ve been saying government bonds are a horrible place to put your money.
Consider the 10-year U.S. Treasury. From 1962 to 2007, 10-years paid an average interest rate of 7%. Today, they yield just 1.5%.
It’s become nearly impossible to make money in these bonds.
• What’s worse, investors are earning less money while taking on more risk…
When someone with bad credit borrows money, they have to pay higher rates than someone with good credit. The same is typically true for companies and governments.
With Treasury yields near record lows, the government can borrow money for almost nothing. You might think this means the U.S. government has rock-solid finances.
But the opposite is true. Today, the U.S. government is $19.3 trillion in debt. That’s an all-time high and 130% higher than a decade ago.
The government’s debt-to-GDP ratio also hit 106% this year. That’s the highest level since World War II.
• Most government bonds are terrible investments today…
This summer, interest rates on German (-0.10%), British (0.64%), and Japanese (-0.09%) 10-year government bonds all hit record lows.
Even the yield on 10-year Italian government bonds recently hit record lows. They currently pay 1.1%. As we told you yesterday, Italy’s banking system looks like it’s about to collapse. Yet, its government bonds pay almost nothing. This makes it seem like Italy is a safe place to put your money.
Of course, Dispatch readers know interest rates didn’t get this low on their own. They hit record lows because governments have been desperately trying to “stimulate” their economies.
Since 2008, central bankers have cut rates more than 650 times. They thought the global economy would grow if folks could borrow money for almost nothing.
It hasn’t worked. The U.S., Europe, and Japan are all growing at the slowest pace in decades.
• Meanwhile, global debt levels have exploded…
Consider U.S. corporate debt.
Since 2007, U.S. companies have borrowed more than $10 trillion in the bond market. Last year, they issued a record $1.5 trillion in bonds. Corporate America is racking up debt faster than it did during the dot-com bubble or before the 2008 financial crisis.
Foreign corporations are also borrowing like there’s no tomorrow. According to International Business Times, emerging market corporate debt has jumped five-fold over the past decade.
Credit rating agency Standard & Poor’s (S&P) doesn’t expect this wild borrowing binge to end anytime soon. It recently warned that global corporate debt could soar from $51 trillion to $75 trillion by 2020. That’s a staggering 47% increase in four years.
The global financial system is now far more fragile than it was before the 2008–2009 financial crisis. According to International Business Times, corporate leverage, or net debt to earnings (EBITDA), is now twice as high as it was in 2007.
• Gross says the global economy is getting close to its breaking point…
Business Insider reported yesterday:
The credit-fueled economy is running out of steam, and central banks can continue with their easing but doing so will distort the markets. These two realities, Gross said, will eventually lead to disaster and terrible returns for investors unless there is serious GDP growth pickup.
Yesterday, Reuters reported just how big of a “growth pickup” we would need to see:
Nominal growth, according to the fund manager, needs to reach 4 percent to 5 percent in the U.S., 3 percent to 4 percent in Europe and 2 percent to 3 percent in Japan before the global economy “devolves into Ponzi finance, and at some point implodes.”
Last quarter, the U.S. economy grew at an annual rate of just 1.2%. Europe is growing at just 1.6% per year. And Japan is growing at just 1.7%. In other words, it would take a miracle for the global economy to avoid a complete meltdown.
• We encourage you to take shelter in gold immediately…
As we often say, gold is real money. It’s preserved wealth for thousands of years because it’s unlike any other asset. It’s durable, easy to transport, and easily divisible. Unlike paper money, its value isn’t tied to a government or central bank.
We constantly remind you of this because most folks don’t understand why it’s important to own gold.
The mainstream media has tricked them into thinking gold is a “barbarous relic.” Just last month, The Wall Street Journal published a story in its MoneyBeat section titled “Gold: It’s Still a Pet Rock.” The author argued that investing in gold is “a leap in the dark.”
Clearly, the world’s greatest investors don’t agree. As we showed you, they’re buying gold hand over fist.
This tells us two things. 1) Something is very wrong with the economy or financial system. And 2) You should own gold if you don’t already.
• We encourage most investors to put 10% to 15% of their wealth in gold…
Once you own enough gold for safety, consider buying gold stocks for profit.
Gold miners are leveraged to the price of gold, so a small move in gold can trigger an explosive rally in gold stocks. This year, a 27% jump in the price of gold has caused the VanEck Vectors Gold Miners ETF (GDX), which tracks the performance of gold stocks, to soar 129%.
After a huge run like that, you might be thinking you missed the boat on gold stocks. But the average gold stock gained 602% during the 2000–2003 bull market. The best ones rose more than 1,000%.
Doug expects even bigger gains in the coming years. According to Doug, gold stocks are in the early innings of a “true mania.”
As we mentioned earlier, to help you take advantage of this incredible opportunity, Doug’s sharing “The Casey Method” to picking gold stocks for the first time. To learn more about Doug’s secret money-making strategy, watch this short presentation. As you’ll see, there’s never been a better time to own gold stocks.
As Bill Gross said, the debt-fueled economy is running on fumes right now. When the average investor wakes up to this, they’ll dump stocks and bonds and take cover in gold.
Chart of the Day
Real assets have crushed financial assets this year…
Today’s chart shows the performance of six different asset classes since the start of the year. You can see that gold, silver, platinum, sugar, and lumber (real assets) have done far better than stocks and bonds (financial assets) this year.
Bill Gross thinks real assets could outperform financial assets for years to come. Yesterday, he said real assets are the best place to put your money in today’s “high risk/low return world.” We couldn’t agree more.
For the last eight years, central bankers have levitated stocks and bonds by flooding the financial system with cheap credit. But, as we’ve seen lately, the “easy money high” is starting to wear off. Investors are starting to realize the financial system is incredibly fragile. They’re moving money into assets with intrinsic value like gold and silver.
We expect to see more of this in the coming years. If the financial system runs into serious trouble like we expect, gold and silver could soar even higher as investors seek safety.