Early or Wrong on Gold? (w/ Brent Johnson) | Gold - YouTube

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So, of course, as always, I have a lot to say about gold.

You know, I think the first thing I want to get across is that my thesis on gold has not

changed.

Everybody should own gold.

It should be part of everybody's portfolio.

And you know, I've said for a long time that gold is going to go to at least $5,000.

That hasn't changed.

Gold is going to go to $5,000.

And the reality is, it's probably going to go a lot higher than that.

But so-- for anybody that's trying to put me-- you know, peg me down as far as time

and price, I'll say $5,000.

Now, I don't know if I'm going to necessarily tell you exactly when.

But I still think gold goes to at least $5,000.

The only question is when.

But part of the other thing is that-- part of the reason that gold will go that high

is because it will be at least part of the solution when this, you know, horrible system

that the central banks have created eventually comes down.

You know, this dollar milkshake theory is not one in which the dollar remains the world

reserve currency.

I think we're going to get to a place where the dollar gets so strong they're going to

have to come to some new kind of Plaza Accord or some kind of a system where they dramatically

reduce the dollar.

But it's not going to be where-- where we-- that we reduce the dollar and people are mad

at us.

I think the world's going to beg us to reduce the value of the dollar.

Because you know, the strong dollar, quite honestly, it just breaks the entire monetary

system.

It breaks international markets.

It breaks emerging markets.

And it actually is, in the long term, not great for the US markets either.

But it doesn't mean it's going to happen right now.

So I think over the next couple of years, the dollar goes much, much stronger.

I think initially, that breakout is going to surprise a lot of people.

I think it's going to create a lot of chaos.

And it will ultimately be that chaos that makes gold go a lot higher.

I tell people all the time that a lot of the typical gold theory is that the dollar gets

inflated away and gold goes through the world-- goes through the roof.

And there is that view.

But there is nothing that is more long-term bullish for gold than a strong dollar.

Before we get into that, let's talk about a little bit why gold, quote-unquote, "hasn't

worked" for the last several years.

Well, the reality is is I think gold has worked for the last several years.

Many of us in the gold world got it wrong as far as timing when it would work in US

dollar terms.

But if you're not a US dollar investor, you know, and you lived in Cyprus, or Russia,

or Argentina, or Venezuela, gold worked just fine.

Gold did what it has always done for 5,000 years.

It's provided a safe haven when things got bad.

And the reality is is that things did not get worse here in the United States over the

last five or six years.

And as a result, gold has not performed as it has in those other currency terms.

But it doesn't mean that gold isn't working.

I think a lot of the pain and a lot of frustration with those in the gold world that are feeling

the frustration from gold not having done anything are those who bought gold as a speculation,

not as an insurance.

Or it's those who told themselves they bought it as insurance, but really bought it as a

speculation or a "get rich quick" scheme.

If you bought gold as a hedge against the rest of your portfolio and the rest of the

world blowing up or all the spinning plates that the central bankers have going crashing,

then gold is still working.

Because the reality is, the plates have not crashed yet.

They will.

There's no doubt that they will.

But they haven't yet.

And so gold hasn't needed to do anything.

But gold's been around for 5,000 years.

It's always been, at least from a market perspective, a currency and the last currency of resort.

And that's not going to change over the next 5,000 years either.

So if you're a gold investor, and you have it in your portfolio, and you didn't put all

your money in gold, you're probably just fine.

So now, there's also many people in the gold world who will say that the only reason gold

hasn't worked for the last five years is manipulation, that the decades long gold manipulation scheme

between the central banks, the governments, and the commercial banks have worked together

to keep the price of gold low.

Now, even if you take that view, the fact is, you are still wrong.

Because if you-- this is not a new theory.

This manipulation theory has been out there for decades.

Anybody who's spent more than five minutes in the gold world knows about this theory.

So if you bought gold five or six years ago, four years ago, whatever it is, and you were

wanting it to pay off much quicker, and it didn't because you think it's been manipulated

over that time period, well, the only reason you would have bought it four or five years

ago is not because it wasn't manipulated.

You knew it was manipulated.

The only reason you bought it then was because you thought that the manipulation was going

to fail.

And the reality is the manipulation hasn't failed.

If you subscribe to the view that gold has been manipulated lower, than the manipulation

is still working.

Right?

And so I think it would help a lot of people in the gold world if we would just admit that

we've been wrong for the last five years.

I didn't think that the monetary authorities could keep the plates spinning for another

five or six years.

I thought it would come down much sooner than that.

I was wrong.

The plates are still spinning.

But it doesn't mean that gold has failed.

It just means we've got timing wrong.

And I think the fact that if-- if you say the words, I was wrong, it's very freeing.

It actually-- it takes a lot of pressure off you.

And you can actually then move on to the next step and say, well, why was I wrong?

Why did the gold not go up?

Why are the plates still spinning?

And I think that will help prepare you for the next five or six years.

So now, let's talk a little bit about the dollar milkshake theory and how that applies

to gold.

Well, I think it largely depends on where you're sitting and in what currency you're

denominated.

You know, if you're an international person or entity, and you are not denominated in

dollars, whether-- I don't know if you're in euros, or you're yen, or you're yuan, or

bolivar, or whatever you are, I think you can probably pretty much back up the truck

and buy over the next couple of months.

I think the dollar's going to get a lot, lot stronger.

But if the dollar gets a lot, lot stronger, that means a lot of these other currencies

are getting a lot, lot weaker.

That means gold, in those terms, is probably going to go a lot, lot higher.

It would not surprise me at all in these other currencies of gold rises 15% to 30% over the

next 12 to 18 months.

I think that could easily happen.

So I think determine where you're at and which currency you're denominated before you just

say gold is going up or down.

I think that's a very important point to make.

Now, I think it gets a little bit more complicated if you're a dollar investor.

You know, I have said for over two years now that I think eventually we're going to get

into a situation where dollars and gold rise together.

And I still firmly believe that.

The strength of the dollar is going to cause such chaos in the global monetary system that

the safe haven that gold has always provided, I think, is going to come into higher demand.

And there will be a point where they rise together.

Now, that said, for those of you that heard me say gold's going to $5,000 earlier, I want

you to keep those positive feelings that you had when I said that because I don't know

that it's going to happen over the next five or six months.

In fact, I think there's a good chance that gold goes lower in the short term.

It might not.

And if it goes higher, I will embrace the breakout.

And we'll be on to, probably, another five or 10-year bull market in gold.

But I'm just not sure that it's going to break out yet.

You know, we had another great opportunity this spring to break out, and it didn't happen.

And I think with the move that the dollar is going to make over the next six to 12 months,

I think it will be very challenging for gold to break out initially with that.

And so I think if you are a US investor, or a dollar-based investor, I'm not saying that

you should sell your gold.

The gold theory is still very much intact.

But I'm just not convinced it's going to break out right now.

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