Why Investors Should NOT Put All Their Faith in Gold

Jeff Siegel

Written By Jeff Siegel

Updated April 19, 2020

Forty-two consecutive quarters of economic growth…

This is what we’ve been enjoying since Q3 2009 when the Great Recession finally petered out.

Government economists have been tracking this stuff since the 1850s, and this has officially been the longest run of uninterrupted growth we’ve ever seen.

Over the past 10 years, GDP has grown by more than 25%, employment has grown double digits, and jobless rates are at record lows.

Of course, there is a down side. And as an investor, you would be wise to pay close attention to what I’m about to share with you.

This Won’t End Well

Today, the U.S. is more than $23 trillion in debt and will add more than another trillion, every year, for the next 10 years.

According to the Congressional Budget Office (CBO), by 2049, the national debt will be nearly one and a half times the size of the U.S. economy. The CBO calls this “unprecedented levels.”

So the question is, with the economy currently so strong, why are we not trying to get our fiscal house in order while we still can?

As pointed out in a recent piece in Reason magazine:

Compare all this with early 2001, at the end of the second-longest economic expansion in history. The federal government was running a surplus. The national debt was falling and amounted to only 31 percent of GDP. That’s what you’d expect to see now, since deficits typically fall when the economy is growing and grow when the economy is rotten.

Some worry that if Trump loses his re-election bid, he’ll lose to someone on the far left who will undoubtedly push for a major spending spree.

A fair worry, to be sure. Although to suggest that this current president, or the GOP in general, have been fiscally responsible would be foolish. In fact, over the past few years, the party that used to champion fiscal restraint is now no more “fiscally conservative” than a drunk college student with a new credit card and an internet porn addiction.

Point is, this little debt-laden prosperity party we’ve all been enjoying for a very long time is eventually going to come to an end, and it’s not going to be pretty when it’s time to pay the fiddler.

25 Years Is Too Long

Now plenty of folks will tell you to buy gold in preparation for this meltdown.

As I noted last week, while you can make some decent coin trading gold stocks, particularly in anticipation of a major economic meltdown, there are still much better ways to make money.

Look at it like this…

In 1994, you could’ve bought gold for about $300. Last week, that gold was worth about $1,500. So that’s about a 400% gain — pretty sweet, except for the fact that it took more than 25 years to realize that gain.

That comes to just under 7% per year, certainly nothing to sneeze at. But I’ve made far more in a single year by focusing on everything from renewable energy and sustainable agriculture to biotech and pot stocks.

In fact, in three years, I pulled in a 3,015% gain from a single pot stock called Canopy Growth Corporation (TSX: WEED).

I can guarantee you that the scratch I pulled in from that one pot stock will do far more to protect me against any kind of major economic implosion in the near future.

That’s just one of dozens of major scores I’ve landed over the years by getting in early on undiscovered, and oftentimes, unloved industries that are set for major moves.

I did this in the renewable energy space, I did it in the sustainable agriculture space, and, most recently, I did it in the cannabis space. And I’m not even warmed up yet.

Truth is, I’ve discovered a new industry that could actually make everything I’ve done up to this point seem trivial.

In the coming weeks, I’m going to tell you more about it. So keep a look out for that.

In the meantime, if you’re going to buy gold, do so with the understanding that it is simply one of many tools in the shed and should really only be used as part of a well-diversified portfolio.

To a new way of life and a new generation of wealth…

Jeff Siegel Signature

Jeff Siegel

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Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.

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