Gold has been a popular topic in these pages over the last few weeks… and with good reason…
Stocks have been in turmoil and are now on pace to book their worst December performance since the Great Depression.
So… before we get to today’s questions and answers, we urge you to stop and review our Ultimate Crisis Playbook if you haven’t already.
It lays out the top strategies Teeka Tiwari, Bill Bonner, Doug Casey, Jeff Brown, Nick Giambruno, E.B. Tucker, and many of our other Legacy Research experts use to protect their wealth in market downturns… recessions… even depressions and market crashes.
You’ll learn about why owning some gold and gold coins is always a good idea… how to take advantage of crisis opportunities… even the top 10 items for a “bug out” bag.
As a Daily Cut reader, you can access it here for free.
And now, for today’s mailbag…
We’ll begin with a reader who wants to know the answer to the most important gold question of all…
Reader question: Lately, you have been aggressively advising us on the idea of owning gold. Any particulars on this that I should know?
– John F. (Legacy Research member)
We’ve got you covered, John.
The expert team assembled by Legacy Research co-founder Doug Casey has all the answers you want… They put together The Gold Book, and, as a Daily Cut reader, you have complimentary access to it.
It’s 48 pages filled with everything you need to get started as a gold investor – including a four-step checklist for buying the right coins… flexible storage options… and what to look for in a gold stock.
And now, here’s another question about gold… and it’s an unusual one. But Crisis Investing chief analyst Nick Giambruno is on the case with a thorough answer…
Reader question: I was wondering if you can give an update on what is happening with the crypto/blockchain universe for precious metals. I had heard that Sprott is working on a crypto coin for silver and other precious metals? Can you give us some info on this new development?
– Don L. (Legacy Research member)
Nick’s answer: I personally believe there will never be a gold-backed crypto that can completely stand in for gold. There is simply no substitute for owning physical gold that you can readily hold in your hand.
However, owning large amounts of physical gold presents its own challenges. It’s hard to store securely, move long distances, and break down into smaller amounts. A gold-backed crypto can help address these drawbacks.
That’s why I view gold-backed cryptos as a complementary tool for individuals all around the world to access sound money. And it’s why I reached out to my old friend Rick Rule, president and CEO of Sprott U.S. Holdings, to talk about Sprott’s new, gold-backed crypto – VaultChain.
I’m happy to share what he told me with you and your fellow Daily Cut readers. Here’s Rick:
First, we believe that the potential audience for gold and cryptos is very similar. The people who believe that there should be mediums of exchange that aren’t government-sponsored will adopt both cryptos and gold.
Second, we saw how the distributed ledger could make the inefficiencies of the gold trade go away, to the benefit of all users.
Third, we saw a circumstance where there was a proliferation of crypto products that were in and of themselves faith-based currencies, a floating abstraction. Dogecoin is an example that started off as a joke, and then got a bid.
We believe that using the distributed ledger technology to make gold trading more effective was something that the market wanted, and secondly, a logical extension of the Sprott brand, which is in some investors’ minds synonymous with precious metals. We already manage well in excess of $4 billion in exchange-traded precious metals on the New York Stock Exchange and thought an extension of our brand to a crypto product was a logical thing to do.
What was holding us back was the technological capability internally to cause that to occur. When IEX [Investors Exchange] – the sort of flash-boys guys – came into the equation and in fact approached us about being their partner in enabling distributed ledger and blockchain technologies in gold, that was just an offer too good to pass up.
Now that VaultChain is available, I’m more excited than ever about the potential of gold-back cryptos. And here’s why…
The value of bitcoin and other cryptocurrencies can be wildly volatile. Gold-backed cryptos, on the other hand, should have relatively stable prices. They also allow people to send and receive gold as easily as they send an email.
This should make them appealing to merchants, lenders, businesses, investors, escrow services and the like… anyone who wants to conduct business in gold – but also wants the convenience of cryptocurrencies.
Businesses could use gold-backed cryptos to pay rent, salaries, or other ordinary expenses. The possibilities are enormous. I think that could open a huge new ecosystem.
That’s why I think gold-backed cryptos could create a genuine revolution in finance and why I’m so excited about them in general.
Moving on from gold… on Monday and Tuesday, we showed you how autonomous electric vehicles will change the world. But an astute reader noted one key aspect we didn’t cover.
Luckily, Nick Giambruno was on hand yet again with some answers…
Reader question: What a thought-provoking article about the future of transportation. One question arises… I understand how Saudi Arabia and Russia will take it on the chin. But what will happen to the petrodollar?
Our single most important export is those green scraps of paper with George’s face on them. Does it not live or die with the oil business? What are the ramifications of that?
– Detlef N. (Legacy Research member)
Nick’s answer: This is definitely an interesting question. There are two problems with answering it, though…
The first problem is that gaming out what would happen to the petrodollar when electric vehicles become dominant is very complex. It would easily require an entire newsletter issue to answer.
The second problem is that, ultimately, it’s a moot point.
To put it as succinctly as possible, I would say that I don’t even expect the petrodollar system to last until the age of electric vehicles. It’s more likely that before then, Saudi Arabia will collapse… or that China’s new yuan-based oil contract – or something else – will overtake the petrodollar system by then.
For our last question of the week, we turn to one of the many Daily Cut readers who responded to our question at the end of last Wednesday’s issue, “The Ebola of Privacy Invasions.”
If you haven’t read it, we showed yet another way Big Tech is selling your freedoms away. And we asked, “Are we overreacting to what’s going on? Are we missing something?”
Reader question: I don’t think you are going too far and I appreciate these updates! I recently took the first of the four steps [in the guide to going dark online]. I deleted my Facebook profile. I didn’t use it much and not at all after recent news reports and the story on Frontline.
The next step is to start to de-Google, and my first step in that process is to replace my Gmail account with one that doesn’t track my email activity. Is there an email client you recommend?
Keep up the great work!
– Don K. (Legacy Research member)
Colleague Teeka Tiwari, who heads up our Palm Beach Letter advisory, has been pounding the table on digital privacy since even before we launched The Daily Cut. So we reached out to him for some insight…
Teeka’s answer: You want an email account with “end-to-end” encryption. The one I use is called ProtonMail – out of Switzerland. It was developed by guys at MIT and the largest particle physics lab in the world, the CERN research facility in Switzerland.
What do I mean by “end-to-end” encryption?
It means your private data is encrypted at all steps – when it’s sent and when it’s stored. Even the guys at ProtonMail can’t read what you’ve written. That makes it much more secure from prying eyes.
And by the way, ProtonMail’s commitment to privacy is absolute. If you lose your password, to keep your data private, ProtonMail will completely erase your account. And you won’t be able to get it back.
This will be the last Friday mailbag of 2018. And what a year it’s been…
From the rise of the Surveillance State in the U.S. and overseas… to the birth of whole new industries, like cannabis and autonomous electric vehicles… to the mayhem in the equity, gold, and crypto markets… we’ve been at the forefront of all the biggest issues.
So, before signing off, we’d like to thank all our readers for joining us in this endeavor. We’re grateful for every one of you, and we’re excited to continue uncovering even more big ideas, insights, and recommendations that you won’t hear about in the mainstream financial press.
Merry Christmas and Happy New Year.
P.S. Unless stocks stage a huge post-Christmas turnaround, this year’s Santa Rally – and indeed all of 2018 – will be the equivalent of a lump of coal. That’s why we’ll spend all of next week showing you how to build your wealth and, even more important right now, how to hang on to it when things turn ugly.
So keep an eye on your inbox all through the holidays as we continue publishing The Daily Cut at our regular time.