The Pandemic’s Impact on Precious Metals
The recent global pandemic has created a unique scenario for investors, particularly those drawn to precious metals. With gold traditionally regarded as a safe haven during economic uncertainty, the unprecedented turmoil in the gold market has led to speculative behaviors. As Max Keiser highlighted on his Keiser Report, a surge in demand is pushing prices and prompting billionaires to hoard gold, but what happens when supplies run out?
Can’t Find Gold? Try Bitcoin!
Keiser predicts a curious outcome: as gold becomes scarce, people will begin to look for alternatives, and Bitcoin is likely to top that list. According to him, once the big names in finance can’t get their hands on gold, they will undoubtedly start ‘flocking en masse’ to Bitcoin. This irony is palpable, as many investors might end up swapping one shiny asset for another, albeit a digital one.
The Volatility of Gold Prices
In 2020 alone, gold has experienced significant price fluctuations. Just a couple of weeks ago, the price dipped to around $1,469 but quickly surged to almost $1,629—an eye-watering swing of 10.9% in a week. Investors’ angst might just be the catalyst for a shift towards Bitcoin, as they seek stability in the face of chaos.
Why Bitcoin Beats Gold (In Most Cases)
When stacking Bitcoin against gold, the advantages are stark. Gold is notoriously difficult and risky to transport, particularly across borders. You can’t just slip it into your pocket like a flash drive full of digital currency. Moreover, the authenticity of gold can be murky; there’s no universal ledger to confirm that you actually own a legit, shiny nugget.
- Storage Nightmares: Gold typically requires secure, costly storage, whereas Bitcoin is stored in digital wallets.
- Supply Control: Unlike gold, Bitcoin’s supply is capped—good luck printing more of that during a crisis!
The Crisis of Gold Mining and Production
As the pandemic rattles the economy and leads to lockdowns, gold mining operations face significant disruptions. Unlike 2008, when mines could ramp up production to meet surges in demand, these operations are now shutting down, creating an expected squeeze on supply. Keiser succinctly summarized this situation by drawing parallels with panic buyings, like the infamous toilet paper shortages—”we could be encountering a severe crisis in the gold markets, just like in the toilet paper markets.”
Billionaires vs. Toilet Paper: A Humorous Take
In a world topsy-turvy thanks to the pandemic, Keiser’s perspective on billionaires and their views on gold is downright humorous. He quipped, “billionaires think of gold and silver the way the unemployed think about toilet paper.” It’s a bizarre, yet very astute observation on economic behavior during a crisis.
