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Gold Provides Monetary Policy Protection

In a recent interview with Kitco, Brien Lundin, creator of the Gold Newsletter and CEO of the New Orleans Investment Conference, explains why we will have negative real interest rates under the current “monetary regime” forever. Soaring off of loose monetary policy, gold is back above $1,600 per ounce. The VanEck Vectors Junior Gold Miners (GDXJ) rocketed 4.1% higher Tuesday to close at $42.66 – its highest level since the first few trading days of the year.

Loose Monetary Policy Forever = High Gold Prices

In discussing loose monetary policy in perpetuity, he cites growing global debt as the underlying strength for gold and silver prices. As governments fight deflation by devaluing their currencies, hard assets, such as gold and silver, are benefiting.

He added that the precious metals have embarked on long-term bull markets, according to Brien Lundin. With gold breaking out through $1,600 per ounce today, it is hard to argue with him. Silver was up 2.7% Tuesday afternoon, while gold was up 1.25%. Silver is historically the more volatile metal.

Lundin concludes,

“If you like gold, and you should, then you absolutely have to love silver. It is a natural leverage to gold.”

And that,

“There is no bull market in the equities unless there is an underlying gold bull market that attracts speculative investors to the metals in general.”

He believes further opportunity exists in zinc and copper markets but believes we need an underlying bull market in gold for those other metals to perform well. Lundin recommends investors take the current bull market seriously. Finally, he posits that monetary policy will guide the gains, but they won’t come easily and without significant research. Wise advice from an old sage in the gold investing business.


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