The Mother of All Bubbles | The Gold Standard #2117

https://www.midasgoldgroup.com/

In this episode, Ken Russo, SVP of the Midas Gold Group, and Gold Standard host Dave Deno take a no-holds-barred look at the nation's economy and talk about the mother of all bubbles, today's stock market. Stressing the point that all bubbles burst eventually, Dave warns that it's not a question of if but when.

What is a Bubble?

The market value of an economic bubble escalates rapidly. There is often a widespread feeling of euphoria that makes everyone think it will last forever. Investors move lots of money around and become focused on short-term gains. People like you and me join the frenzy and start speculating with their money without realizing it. Before you know it, the party is over, and the bubble burst, which means there's a sudden decrease in value. Once a crash happens, valuable stocks become worthless.

Bubble Bursts of Recent History

Before the conversation kicks off, Dave gives listeners a concise rundown of some of the most significant bubble bursts of recent memory. The tech bubble in Silicon Valley left many would-be retirees without savings, and they had to return to work. Then there was the housing market bubble which left many families homeless.

Governments Like to Kick the Can Further Down the Street

Since the financial crisis of 2008, central banks have accumulated massive amounts of debt while creating large amounts of cheap currency. Rock bottom interest rates and asset bubbles in equities and real estate are just part of the result. The debt load and printed money have also helped prop up one of the shakiest stock markets in history. Ken points out that giant tech companies like Microsoft, Apple, and Amazon are the main drivers of increasing stock prices while the real economy, which we live in, suffers. The market performance of these giant corporations has outperformed the rest of the S&P 500, but this isn't sustainable. The disease that plagues the rest of the market will catch up with them eventually. It's all a matter of time. Governments can only kick the can down the street so far before there's a day of reckoning.

The Mother of All Bubbles Continues to Grow

When the mother of all bubbles burst, you don't want to be the one left standing when the music stops. The fact is that many people are putting their retirement at risk. Far too many are overinvested in stocks and haven't taken the precaution to diversify their portfolio with tangible investments like gold and silver. Where will people turn when they realize all they have worked for, saved, and invested, is gone? There won't be enough time left to wait out the inevitable market downturns.

The Problem with Saving Lots of Cash

While the lack of spending during the Covid-19 lockdown helped households save much more than usual, it also left many holding a lot of cash. Holding onto cash reserves will result in a loss of spending power due to the corrosive effects of inflation. It's better to transfer some money in savings to a reliable store of value like gold and silver.

Knowledge is Power

And that's why THE GOLD STANDARD exists, to give listeners the information they need to ask the right questions and make better decisions for protecting their wealth. Each of us has got to be responsible for protecting our financial future.

The Australian Gold Swan

This episode's featured bullion product is the beautiful 24-karat Gold Australian Swan struck by the highly regarded Perth Mint. Ken vividly describes the coin's design, the reverse by and explains why it has numismatic value apart from the intrinsic value of the .9999 pure gold. Unique amongst government-sanctioned bullion programs, the Gold Australian Swan has an incredibly low mintage of 5,000 coins annually. Compare that with the mintages of the one-ounce American Gold Eagle, which averages between several hundred thousand to over one million each year. The lowest mintage Gold Eagle was 1991's half-ounce Gold Eagle with a mintage of 24,100. The lowest mintage for a one-ounce Gold Eagle was 108,000 in 2019.
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