By: Data from Mark Lundeen with commentary by James Turk
King World News obtained written permission from Mark J. Lundeen to share this incredible table he put together utilizing information he gathered from Barron’s. James Turk added the actual number using M3 and it was shocking. This is a jaw dropping snapshot showing the amount of dollars in circulation per one ounce of gold at various points from 1945 to today.
According to James Turk, the number is even more staggering when you use M3 because it captures all of the dollars in circulation. It is the total amount of paper currency and total deposit currency within the banking system. And if you use M3, the actual number is $53,957 in circulation for every one ounce of gold. Turk commented, “That is even assuming the US actually possesses all of the gold it claims to own.”
James also added, “While the M3 number is frightening, Mark’s calculation shows that gold is still undervalued.”
The gold and silver markets are in the process of moving towards fair value. Unless a fixed rate for gold is established, the reality is that a mania will develop and gold will grossly exceed fair value as it did in 1980.
What readers globally need to realize is that is does not matter whether gold is trading at $1,300 or $1,400, the fact is that gold is dramatically undervalued by any metric, and everyone should be exchanging their fiat money for gold because of that fundamental undervaluation.
All Things Considered – John’s Commentary
Gold and silver “seem” expensive only because of where they have come up from. Plus, they had been in decline from the 1980’s through the mid-2000’s. Why? Paper assets were in vogue and tangibles were not. Now that paper assets have seriously come in to question, tangibles are once again viewed as increasingly valuable for their intrinsic value. Gold and silver are long term accumulations for the foreseeable future. $5,000 gold and $150 silver are an absolute lock.
Action to take: There is a temporary lull in the action. Continue to add in modest amounts over regular intervals. If you feel you have accumulated your entire position, hold on and sell only if you absolutely must.
What to buy: Stick with the basics, in silver: 90%, 1 oz. rounds and 100 oz. bars (in this order.) In gold: the lowest premium 1 oz. or near 1 oz. coins available.
Quote of the day: “Borrowers will default. Markets will collapse. Gold (the ultimate form of safe money) will skyrocket.” – Michael Belkin
