GS - A Watershed Moment for Gold | Benzinga
Source: Michael Ballanger 04/01/2024
Michael Ballanger of GGM Advisory Inc. shares his thoughts on the current state of the gold market and one stock he believes is worth keeping an eye on.
When I first came up with the notion of writing a weekly newsletter, it was spawned from my habit of writing letters to clients way, way back when I toiled in the Canadian investment industry. In addition to being able to save a lot of time and energy by writing one letter to all clients, it enabled me to see the "big picture" as it pertained to the types of investments held in client accounts. Originally named "The Venture Capital Update" I used the word "venture" because of a famous quote that I found very early in my career that differentiated between the hedonistic practice of "gambling" and the noble art of "speculating."
"Gambling is a venture without calculation; speculation is a venture with calculation."
While investment purists would tell you that whether one is gambling or speculating, neither one is actually investing because investing involves the adherence to historically conservative, longer-term investments that throw off cash returns in the form of dividends or interest. Since none of the securities in which I specialized ever paid anything close to a coupon or dividend, I renamed the weekly missive "Gold and Gold Miners Update" in 2009 because I determined that the ocean full of bailout cash and credit splashed around the Wall Street banks in order that they could make payroll in 2008 (with liberal and completely obscene bonuses included) was going to be an inflationary event that would render gold and silver into highly-effective ventures.
That all ended in 2011 and was punctuated two years later with the Sunday Night Massacre, where the global banking community teamed up and blasted every available bid, sending gold and silver into what would evolve into a very nasty four-year bear market. I was actually quite happy with my weekly note until 2015, with gold trading just above the bear market low of $1,045, when I wandered into the office of a very well-heeled doctor and inadvertently saw my newsletter next to the coffee machine, protecting the surface of the table from the horror of caffeine.
So effective was my newsletter that one could barely make out the title or the name of the author, while piled neatly on the real coffee table was a stack of magazines and brokerage reports all discussing cannabis, crypto, or Indonesian love secrets. I went back to my office and immediately decided to change the name not in favor of any particular sector or industry but rather to remove any and all references to gold. I changed all the templates, letterhead, and business cards to "The GGM Advisory" and I did so at the absolute bottom of the bear market in gold — December 4, 2015.
The reason I relate this story to you all is the closing price for gold last evening, marking the end-of-week, end-of-month, and end-of-quarter ascent to all-time highs.
When I first launched the GGM Advisory in January 2020, I was certainly not aware that any laboratory technicians in Wuhan, China decided would decide to play frisbee with an infected bat in the local wet market, triggering a series of reactionary events that would forever change the scope and range of the term "sovereign debt."
Just as the gargantuan gobs of liquidity saved the banks in 2009 were seen to be inflationary by most rational market enthusiasts, an amount many times greater was thrown at the citizenry of the world to help their immune systems fend off those microbes that had threatened humanity for hundreds of thousands of years.
I surmised that the steps taken by our elected visionaries (politicians) would be outdone only by the inflationary exploits of the un-elected visionaries (central bankers) that would result in a massive rise in the cost of goods and services, rendering gold and silver as worthwhile ventures. Alas, from August 2020 thought to just before the start of the biggest mining conference in the world, Toronto's Prospectors and Developers Conference known affectionately as "PDAC" gold tried a number of times to advance beyond the 2011 highs just below $2,100 only to be repelled violently time and time again.
Pandemics, massive money-printing orgies of obscene size and vulgarity, Russian insurgence in Ukraine, and a number of bank failures in the U.S. could not move the gold market. Even an overnight explosion brought on by an Asian buying spree last ...