Gold Will Overwhelm Dent

Harry Dent is a good demographer and stands for what he believes.  But this is not about Harry Dent.

Charles Sizemore is a writer and editor who works for Harry Dent, but this is not about Charles Sizemore.

This is about gold!


Over a century ago JP Morgan understood that gold was money and the rest was credit.  But he lived when you could buy groceries with a gold eagle and a cup of coffee cost a few cents.

Ben Bernanke and hundreds of other “paper pushers” ignore gold, pretend not to understand it, and pressure the world to transact business using their paper currency Ponzi schemes.  Why?  Because the dollar (euro, yen, pound) Ponzi scheme produces power and profit for the financial community and politicians.  But this is not about the bankers and politicians who want control over your money as they extract a slice from every transaction.

This is about gold, and it is not personal with Charles Sizemore.  He represents a typical view of gold so I’ll use quotes from his article.  It could have been any of 1,000 other writers.

“Gold isn’t so much an investment as it is an emotional ideology.”  He thinks belief in gold is basically a religion and he is critical of those who believe it is the “one true currency.”  He promotes a mainstream view created by the political and financial elite in the west for their own benefit.  Don’t try to sell this nonsense in China, India or Russia.

History shows that silver, shells, rocks and other items have been used as currency over the centuries, but societies have usually chosen silver and gold as their preferred currencies because they have worked better.  Gold and silver were used because they held value, were universally recognized, accepted, and were convenient.  Gold and silver were used as honest money until the central bankers gained control over the money.

Gold and silver still hold value and are universally appreciated, but you can’t buy groceries with silver or gold.  However, you can use a debit card and pay a 1% fee to the bank, or use a credit card and pay a 3% fee to the bank in addition to 10 – 20% annual interest.  Yes, I know, the grocer officially pays the fee but ultimately you pay it in higher prices.

Sizemore:  “Gold is an inflation hedge…  The big problem here is that an inflation hedge is only valuable when you actually have inflation.”  Hmmm.

  1. Have you looked at prices in a grocery store?
  2. Yes, I know. Gasoline and televisions are cheaper.  Did they compensate for your increase in health insurance costs from Obamacare?
  3. College tuition? NFL games?  Beer?  Cigarettes? Local taxes?
  4. Health care, prescription drugs, hospital care, ER care, doctor office calls?
  5. Apartment rent and housing costs?

But it is misguided to believe that people primarily buy gold as an inflation hedge.  Yes, there was inflation in the 1970s and people bought gold.  People also bought gold during thousands of years when there was no inflation.  The real issue is that gold is an honest currency and therefore is a hedge against currency devaluations by central banks and governments who devalue to increase banking profits and allow governments to overspend their budgets.

When governments and central banks are allowed to devalue their currencies without restraint … they do what you would expect … they devalue their currencies and overspend.  Argentina has devalued their currency so much that they lopped off 13 zeros from their currency in the last 60 years.  The process is less extreme but similar elsewhere.

Sizemore:  “Gold is a crisis hedge….When the world gets shaky, investors tend to flock to the U.S. dollar and to U.S. government bonds rather than to gold.”

Which is more sensible?  Flock to a 5,000 year old currency that has no counter-party risk and is valued globally … or flock to a debt based fiat currency (or bond) issued by an insolvent government that has a 100 year track record of devaluing its currency and has publicly stated its intention to continue that devaluation?

Sizemore:  “Gold is a store of value.  This one I just don’t get… So assigning a real value to gold is just about impossible.”

No comment needed!  Anti-gold propaganda is heavily promoted because gold is honest money that generates little profit for the financial community and because it competes against the paper stuff issued by central banks.

Harry Dent believes that gold prices will fall to $700 and possibly as low as $250 in the next five to ten years, so he discourages buying gold.  If you prefer debt based fiat currencies that can be created by the trillions with a keystroke, confiscated easily, and devalued overnight, then by all means, trust in those dollars, euros, and yen instead of gold.  The financial and political elite might thank you.

It is not about Harry Dent or Charles Sizemore … it is about gold and devaluing fiat currencies.


Read:          Bill Holter:  Harry Dent is Delusional!

Jason Hamlin:  Will Harry Dent Eat Crow…?

Steve St. Angelo:  2012-2015 U.S. Gold Supply Deficit


Gary Christenson

The Deviant Investor

20 thoughts on “Gold Will Overwhelm Dent

  1. I have many items I hold for the long term. Sure I cannot go to the store and expect someone to take them in payment just the same as a bond or share of stock. People are so short of thinking properly.

  2. Gold will overwhelm everybody before the end of 2017 at the latest. The corrupt Fed & Wall St. strategists have simply run out of viable manipulative options. Their game is up. I still can’t believe how 99% of people in Canada & the U.S. are totally unaware of the Bank BILL-IN threat posed by the G20 during their meeting in Australia Nov/14. Central Banks are debt leveraged between 20 -25 to 1 re their hard assets. Derivatives & bonds will sink their ships!

    Physical gold & silver are a save refuge IMO for those with 1/2 a brain. Take refuge while you can folks. Too many leaks in the world’s financial ships!!!

  3. If the inflation rate is more than the cost of storing gold, which it is, no matter what the “official” figures say, then hold gold. I researched this magic 2% rate that the Fed wants to achieve. Apparently it comes from New Zealand where the Govt there said the MAXIMUM rate was to be 2% or the Reserve Bank Governor would lose his job. There was no lower target, ideally there should be no inflation/deflation, but this is too difficult for the “experts” to arrange.

  4. I believe gold has a good bottom in the current price range from a basic supply and demand dynamic. Supply is shrinking and demand is going up. If Harry Dent is correct and gold heads into the $200.00 per ounce range you won’t be able to find a physical ounce of gold to buy. Supply seems tight from demand in Asian countries at present conditions. All the mining companies will be out of business as the last 4 years price drop from $1,900.00 per ounce has been chaotic for the mining industry to say the least. Squeezing demand more by dwindling mine supply and we haven’t even brought up what “brilliant” new ideas the Federal Reserves across the world will due to stimulate growth. Gold looks good to me in this range and I think Harry is going to have some crow with his corn flakes.

  5. The fed isn’t out of tricks yet… they can still muster one more naked short
    market smash….
    The majority of PM speculators that pushed up
    PM in this latest rally will bail and take profits the instant the general
    stock market tanks… they don’t even know why they’re here, accept
    that PM is going up…investors are stupid .
    I have no doubt PM will be victorious in the end, but after watching
    short curve rallies since 2002, I don’t think this will be allowed to stand.

  6. When Gold was at $1900 did you or Bill Holter or Jason Hamlin predict gold would trade close to $1000 again? Dent’s prediction has come uncomfortably close to $700. Hopefully this is as close as he gets.

    • When gold was at $1900 in August of 2011 I was not publishing a blog so I did not predict anything. I can’t say about Bill Holter or Jason Hamlin.

      But I can tell you that my model indicated that $1900 was 30% too high so I strongly suspected that gold would correct. It always does, and as it usually does, both going down and up, gold corrected and overshot reasonable targets. In my opinion $700 is not likely while $2000 is plausible fairly soon – but we shall see in the next few years.
      The Deviant Investor

  7. I like gold. I have about 15% of my assets allocated to the metal. But, as the author notes, gold is not usually accepted by local grocery stores in payment, nor does any US government or State government accept it for paying taxes. Therefore, at this point in time, gold is not money. Gold has been money occasionally in history, but not that frequently or widespread actually. Gold is a hedge against government.
    It seems like the world economic systems are contracting. It appears that the EU, as a union is destined to fail, probably within the next 10 years. The Chinese have over extended themselves, and China is probably headed for a depression. Latin America is not in very good shape. Where is the large money to turn? US treasury securities, US bank deposits, the US stock market, and US real estate, regardless of your feelings (prejudices) towards the US dollar. It truly is the “prettiest” of all the ugly sisters, love it or hate it. The US dollar is destined to die one day, but don’t count it out yet.

  8. Harry Dent is not the first market observer who made a prediction of dramatically lower gold prices. A decade before Dent, Robert Prechter repeatedly warned that the gold would fall first to $200 before the bull market could continue. Today, it is very unlikely that gold will ever again trade at $200, but Harry Dent thinks that is possible in the coming depression/deflation which he predicts based on demographic developments.

    On the other side of the spectrum there were also spectacular predictions by gold bugs, most notably by Jim Sinclair who repeatedly stated price targets none of which turned out to be true. Similarly for Alf Fields who like Prechter based his predictions on wave theory.

    Roughly 10 years ago, Matthew Simmons predicted oil prices to be around $300 per barrel. He was challenged by a NYT journalist and a public wager was closed worth a few thousand Dollars. Simmons died early and was so spared the painful admission that he was wrong. Instead of $300 per barrel, oil prices fluctuate around $30 per barrel today.

    The truth is that gold prices and oil prices are political prices. The price of gold is managed by central banks in order to maintain the confidence into paper money. The price of oil is managed for geopolitical reasons, most recently in order to punish Russia for its disobedience against the US government.

    • You’re wrong about Jim Sinclair’s gold price projections. He stated very early in the new century that gold would reach $1600 in January 2011, if I remember correctly. It hit that in June 2011. He was off by 5 months, from a prediction made 10 Years in advance! I’d say the man knows what he is talking about, as he also called the top in gold in early 1980. Enough said.

      • Sinclair has recently mentioned $50,000 gold thinking the US will descend into a hyperinflationary disaster. I definitely remember his January 2011 prediction of $1600. He was off a few months, but it was one of the best calls in history – and yes, I remember he made it 10 years in advance.

        I don’t understand where I was wrong about Sinclair’s price projections since I did not mention Sinclair in my “Dent” article. Regardless, I think Dent’s projections are based faulty reasoning. We shall see.

        The Deviant Investor

  9. As the EU comes apart and the sovereign debt crisis spreads thru the developed world, ultimately there will be only one asset class at the top……precious metals.
    Capital always flows somewhere……all asset classes never fall at the same time.
    bonds to equities to cash to gold this time around………..the dollar being the last debt instrument to fall.

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