100% Certainty! I'm Afraid Gold is Going to Quadruple ($10,000) When This Happens - Rick Rule

100% Certainty! I'm Afraid Gold is Going to Quadruple ($10,000) When This Happens - Rick Rule

Rick Rule emphasizes that their investment in gold is driven by concerns over the U.S. government's massive financial obligations, exceeding $120 trillion, rather than expectations of modest price increases. Gold could rise significantly, potentially reaching $9,000 or $10,000, driven by these overwhelming liabilities, rather than just a modest increase to $3,000. The speaker views gold as a hedge against the risks posed by the U.S. government's fiscal situation.
The speaker, Rick Rule, a well-known investor and resource industry expert, recommends that individuals allocate at least 5% of their net worth to physical gold, advising that they hope for a price decline. The conditions that typically drive gold prices up are often unpleasant, but silver and gold generally move in tandem, with gold leading the way. Silver tends to outperform gold when it rises. For those considering physical commodities, gold, silver, platinum, and palladium are the most convenient to hold and store.
The speaker, Rick Rule, highlights that during a significant gold price increase, such as a 30-fold rise, having 10% of your portfolio in gold could result in a substantial overall portfolio gain. Even during a more modest bull market, like 2000 to 2010, where gold increased sevenfold, a small allocation to gold could protect the rest of your portfolio from the adverse effects of U.S. dollar depreciation. However, the speaker cautions against overinvesting in precious metals or risky assets like penny stocks related to gold and silver.
Rick Rule discusses the discrepancy between the physical gold and silver available for delivery and the much larger volumes traded in futures markets like COMEX and LBMA. While these markets often trade over 100 times the amount of physical metal available, the physical gold and silver used for settlement must meet "good delivery" standards. This creates potential issues when physical supply is strained, mainly as foreign central banks warehouse large amounts of gold. The speaker advises holding physical gold and silver in a system that ensures liquidity, mostly if short-term price movements are a factor in your investment strategy.
The speaker, Rick Rule, emphasizes the importance of securely storing physical precious metals in vaults owned by publicly traded companies, like Brinks, Lumis, or ViaMat, which can be audited for financial transparency. This ensures the safety of the stored bullion. The speaker stresses the need for vaults to follow best practices and provide access to their balance sheets and income statements to avoid any risk to the stored metals. They make it clear they will not work with vaults that do not meet these standards.
The speaker discusses the financial complexities of the Saudi budget, highlighting the significant social spending required to sustain the Saudi state beyond just oil production costs. While Saudi Arabia's production costs are low, they face substantial state expenses. In contrast, with higher operational costs, Exxon is not burdened by similar state obligations. Regarding Exxon (XOM), the speaker notes that its short-term performance depends on factors like Middle East peace, the situation in Ukraine, and global economic conditions. However, for long-term investors, Exxon remains a solid choice due to its generous and rising dividends, with the speaker personally planning to hold the stock indefinitely.
In the resource industry, particularly for non-U.S. companies, costs are often in the local currency, while the product is sold in U.S. dollars. For example, a Canadian gold producer sells its product in U.S. dollars but incurs labor, energy, and materials costs in Canadian dollars. A falling Canadian dollar benefits such companies, as it reduces the cost of operations while they still receive revenue in more substantial U.S. dollars.

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