Buy gold!

That’s one of our mantras at Legacy Research. And if you’ve been keeping up with The Daily Cut here, here, and here, you know why we’re such gold bugs.

But one reader has a question about our oft-repeated advice.

So we turned to the biggest “bug” in Legacy Research’s “buy gold” crowd – Dan Denning (The Bill Bonner Letter) – for an answer…

Reader question: I’ve written once or twice before and always greatly enjoy your writing, no matter who is currently on the point of the needle. But I do have one question: You often end your musings with “Buy gold.” Why not silver?

– Roland F. (Legacy Research member)

Dan’s answer: I buy silver all the time and “stack” it. Which is to say, I buy cheap silver bullion that’s not going to have any collectible value, like gold, but will move if the price moves.

Unlike gold, silver has an industrial use. That means its supply-and-demand picture is different, and it tends to trade more like a commodity than as money.

Some people buy silver based on the gold-silver ratio, which is historically about 15. Right now, it’s around 83, which shows that gold has moved (as money) and silver has not. You kind of have to hold your nose and buy.

Practically speaking, silver is heavy and bulky to store (I have a safe). But for me it’s like putting money automatically away in savings.

There are also really valuable collectible silver coins to consider. Or you can start out with a “Monster Box” of 500 2019 1-ounce American Silver Eagles. Or if that’s a bit much to begin with, just buy what you can afford.

Most metals bulls I meet store gold to preserve bigger sums… but they stack silver because they think that’s what’s going to be acceptable as currency in a crisis where your paper money is no good. You won’t want to spend your collectable gold coins on bullets and food. But silver… yeah, that’ll do.

And here’s another question about silver for gold-industry insider E.B. Tucker (Strategic Investor, Strategic Trader)…

Reader question: It’s obvious E.B. Tucker likes gold; I’m curious what he thinks of silver.

K & J (Legacy Research members)

E.B.’s answer: I am also bullish on silver, but the two metals are not the same.

Gold is money, a stable asset for wealth storage that’s easy to exchange for currency at any time. Silver is a trading metal in my view. While still a monetary metal, it tends to move as much as three times further and faster than gold… in both directions.

I expect silver to produce a multiple of gold’s move higher. That said, silver is speculative money.

While it’s prudent to have some of both, serious wealth belongs in gold.

If you’ve been reading the Cut over the last few days, you know E.B. hosted a Stock Market Escape Summit on Wednesday to discuss another money-making trend he’s tracking right now.

It’s a strategy he’s used to make millions… And he says 2019 is gearing up to be the perfect year to use it.

Don’t worry if you missed E.B.’s big reveal… You can watch the replay right here.


Our next question concerns protecting your private data – a timely topic, considering one of our Legacy Research experts had his private data compromised just last week.

So make sure you read through to the answer from Nick Giambruno (The Casey Report and Crisis Investing)…

Reader question: I’m not sure whether to aim this question at Dan Denning, Jeff Brown [The Near Future Report, Exponential Tech Investor], Nick Giambruno, Teeka Tiwari [The Palm Beach Letter, Palm Beach Confidential, Alpha Edge, Crypto Income Quarterly], or maybe someone else. So, I’ll let you figure it out.

I’d like to back up my computer drives to a cloud somewhere but prefer the target “cloud” be somewhere other than a datacenter located on U.S. or Canadian soil. I am already somewhat international in that I’m a dual U.S.-Canadian citizen, but I think I’d like to have my data be somewhere that it’s not ridiculously easy for three-letter U.S. agencies and Five-Eyes equivalent types to access.

So that rules out the countries I hold passports for, although I know enough about network design to realize that getting the data “there” from “here” will see it pass through MAE-East, MAE-West, and equivalents (where all those agencies have data taps) along the way, so maybe this is an impossible quest.

Preferably, of course, I’d like the data center also to be in a location where Russia and China don’t have keys to the front door. And someplace where there is a good amount of “local” (does that matter?), computer savvy, and rule of law available to keep the stuff safe.

Basically, I’m looking for the data center equivalent of the international gold storage vaults discussed in all the Legacy Research newsletters. One in Singapore, maybe?

Not that the stuff on my computer is any big deal: actually, I’m boring as heck, and my net worth is pretty tiny at the moment. I just am not a fan of Big Brother and hope to make my net worth go up by an order of magnitude or two, where I might legitimately be of interest to them. Thoughts?

– Beau S. (Legacy Research member)

Nick’s answer: Personally, I use Tresorit, a secure cloud storage company based in Switzerland, which has about the strongest data privacy protections of any jurisdiction in the world.

With Tresorit, your data is secured by end-to-end encryption and stored on servers in Switzerland. Tresorit cannot access its users’ data, as they are secured by encryption the company does not have the keys to. Only the user has access.

I think Tresorit is the most practical cloud storage solution for the privacy-minded individual.

Moving on… Fed chief Jerome Powell appeared on Capitol Hill this week. That got one Daily Cut reader wondering about interest rates… And we turned to Teeka Tiwari for some answers…

Reader question: My question is, if the Fed doesn’t raise rates this year, or maybe raises only once, or maybe only a couple of times over the next 18 months, does that change the likelihood of a stock market crash? Thank you in advance for your response.

– Lee W. (Legacy Research member)

Teeka’s answer: It’s hard to say what the Fed will do next. But as far as the fear of further rate hikes goes, it’s overblown. Interest rates are rising from an abnormally low level – zero – to a more normal level. It’s not that much of a headwind for stocks.

But over the short term, it doesn’t matter what I think. Most investors don’t see it that way. After Powell said last year – in the face of falling stock prices – that he was determined to keep hiking rates, investors threw their toys out of the pram. And we nearly ended up in a bear market.

I expect the same thing to happen again the next time the Fed raises rates. When enough investors are in the throes of a bad idea, they can do a lot of damage.

That’s a long way of saying that there are going to be better buying opportunities ahead. And you want to have dry powder to take advantage of those opportunities.

That’s because, as many of you will know, buying stocks when they are irrationally cheap is one of the most direct routes to market-beating returns.

We’re already 10 years into this bull market. The average bull market going back to the 1950s lasted about five years. So we’re closer to the end than the beginning of this theme-park ride.

We saved this next question for last because there’s a special bonus in our response. Make sure you don’t miss it…

Reader question: While Doug is defining words, he should also define the word “depression” as opposed to “recession.” My definition is that a depression is a protracted period of time where the standard of living of the average citizen is falling.

Doug has previously observed that our standard of living is falling, so aren’t we already in the beginning stages of a depression? We need people like Doug that have mass credibility to alert the population to this reality.

– Doug K.

We agree. That’s why Doug Casey’s old friend and Legacy Research cofounder Bill Bonner asked his research team to comb through the U.S., county by county, to find out where people are better off… and where they aren’t.

Spoiler alert: The team discovered that 73% of U.S. counties are already in a depression.

This research is important to Bill. So he gave us permission to share the report with you and your fellow Daily Cut readers. Read it right here.

Have a nice weekend.



James Wells

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