Gold prices are likely to explode if Britons vote to leave the European Union when they go to the polls next Thursday, gaining as much as 10% in a short space of time.

Gold is seen as a haven for cash. It does not pay a coupon like a bond, and it does not pay a dividend from a stock, but it does mean you own ounces in a physical precious metal that you can hold onto.

And it is for this reason that chief precious metals analyst James Steel and his team at HSBC say that the precious metal will take off after a Leave vote in the UK’s European Union referendum when market turmoil will reign supreme. Here is the quote (emphasis ours):

…continue reading HERE

related:

George Soros has joined fellow billionaire investors Stan Druckenmiller and Ray Dalios on investing big in gold – George Soros Making Big Bets on Gold

The sudden lead for the no side in Brexit vote is just a continuing of the major trend sweeping the world as waves of capital is set to flee the European welfare state seeking safegy. This capital scared out of its wits will effect every market in the world driving up stock prices, housing prices and reducing interest rates whereever it lands. Michael thinks this is just the beginning of a major trend, and highlights where most of this frightened capital is likely to land and the social unrest it will leave in its wake.

…related:

Mike thinks we are moving into an era where asking the government to do something is no longer rational – Government Interference Mayhem

While we await perhaps two of the most important developments this year — the next Fed rate hike and the Brexit vote on June 23 — I thought I’d take a little time and bust some of the myths that many investors get tripped up on.

Let’s take a look at my five favorite market myths, myths that cost investors tens, if not hundreds, of billions of dollars. 

Myth #1: Gold can’t go down when there’s so much money-printing going on. This one is my favorite. All the shrills out there who constantly talk about fiat money and money-printing have egg all over their faces. 

They said gold could never go down when central banks are printing so much money. I said bull: Listen to that garbage and you will lose your shirt.

And that’s what happened to oodles of investors who didn’t listen to me when I said gold had topped back in September 2011. Despite even more accelerated money-printing, gold crashed, losing as much as 46% of its value. 

The facts of the matter are this:

First, what goes up must go down, and vice versa. There is a time for every move in the market, based purely on cyclical and technical factors. So if you get stuck to any one particular theory, vision, or even a set of fundamental forces you believe in, if you don’t realize that there is a time and place for every move the markets make, you will get caught — with your pants down. 

Second, money has always been fiat! It was fiat even when the dollar was tied to gold. Why? Because the powers that be, the rule makers behind the monetary system, always have the power to change the rules, and devalue the dollar, as Roosevelt did in 1932. 

In fact, Webster’s dictionary defines the word “fiat” as “an official order given by someone who has power: an order that must be followed.”

So as long as there are authorities who can change the rules, money, no matter what it is tied to, is always going to be fiat. 

Moreover, money is merely a medium of exchange, not a store of value. Throughout history, money has always been fiat. It was fiat in Roman times, fiat in Byzantine times, fiat in every great civilization and economy in the world, from Asia to Europe.

You might argue that some currencies are more fiat than others. Sure, I can agree to that. But my point is that all money is fiat. Consider even Bitcoin, which is entirely fiat and secured only by its cryptography and the confidence — or lack of confidence — its users have in the digital currency.

Bottom line: Don’t buy into the fiat money nonsense when it comes to gold. Sure, it’s a part of it, but we already saw that part of the fiat argument play its hand in gold’s first leg up, from $255 to its high at $1,920.

That force is now dead, kaput. Gold’s next move higher will largely be due to the war cycles and how they are now showing massive social and geo-political unrest breaking out all over the world for the next four to five years!

Myth #2: Stocks can’t go up when interest rates are rising. Another great one. Fact: Most strong bull markets in equities occur when interest rates are rising!

Why? It’s simple: When rates are rising, they are rising because the demand for money and credit is going up. And if the demand for money and credit is going up, that in turn means that either …

A. The economy is improving, or …

B. That investors want to take on more risk for potentially greater returns, due to other motivations, like getting away from sovereign bonds, investing in stocks as a safe haven against government bank confiscation, and more.

The bottom line is this, especially at the turning point we are now in with historically and artificially low interest rates: Rising interest rates should be nothing to fear and instead should be music to your ears for the equity markets. 

Myth #3: Hyperinflation is the end result of money-printing. I used to subscribe to this one. Until I realized that throughout history there has never been a major core economy that experienced hyperinflation. Not one. 

Hyperinflation only occurs in peripheral economies that do not have deeply liquid stock, bond and currency markets or that have been bombed out and have little or no infrastructure to them.

If you want to bring up Weimar Germany, fine. The Weimar Republic had no bond market, no stock market and in the aftermath of WWI, no infrastructure either. 

As I have been saying now for some time, the U.S. will not suffer hyperinflation. Deflation, yes. But hyperinflation, no.

Myth #4: The dollar is dead. Likely to be replaced as the world’s largest reserve currency — yes. But dead, NO. 

We all know the existing debt-based monetary system with the dollar at its core no longer works in today’s globalized economy. And that a new monetary system is needed. 

A new Bretton Woods, if you will, that learns from all the errors of the past and designs and implements a new monetary system without a single currency at its core and certainly not one based on debt.

That time is coming. That is where the world is headed, toward a new electronic reserve currency unit that is used for international trade and transactions only and with all countries maintaining their existing currencies for domestic use only. 

The dollar will lose its reserve status, but long before it does, it will also gain incredible strength. Put another way, the U.S. dollar will eventually lose its reserve status because it becomes too strong, not too weak.

Myth #5: Real estate prices are sure to collapse again as mortgage rates rise. I love this one, too, since so many pundits subscribe to it. 

But in my opinion and research, it’s a bunch of baloney. Mortgage rates typically negatively impact real estate prices when and only when they exceed the real rate of inflation and/or the anticipated appreciation in property prices. 

Plus, at this juncture in the real estate cycle, as mortgage rates do begin to rise, potential homeowners will want to buy now, rather than later, in anticipation of still higher mortgage rates, helping to push property prices higher. 

There are many more market myths I could go into, but you get the picture. 

The bottom line is this: Wipe your head clean of all the junk you learn from the supposed pundits out there, even the bigwig names from places like Yale or Harvard.

Instead, use common sense, think things through on your own, and question everything. I can virtually guarantee you that by doing so you will make much more money, both over the short term and the longer term.

Speaking of which, keep your eyes glued to the dollar and to gold right now. They’re both signaling big developments lie dead ahead.  

Best wishes as always …

Larry

P.S. Click here for an offer

also:

Why The Biggest Investors Are Praying For A Market Crash

Peter Schiff appeared on CNBC this week with a dire warning on America’s economic future – “It’s gonna be awful!”

Peter said this time around, we’re not looking at a financial crisis. We’re staring down the barrel of a currency crisis. Ultimately, the central bankers and government policy makers will sacrifice the dollar on the altar of the stock market. Their main goal is to make sure the stock market doesn’t crash again. Peter said they might succeed, but only at the expense of the dollar.

So we’re going into a currency crisis, and this crisis is going to be much bigger than a financial crisis. The impact it’s going to have on the average American, on his standard of living, on his way of life is going to be much more profound. And sure, people won’t lose as much money in their stock portfolio, but if they try to sell their stocks and spend the money, the purchasing power that they lose is going to be much greater then what was lost in ’08.”

Peter went on to defend his position, arguing that the only reason the dollar is so strong right now is because people actually believed Federal Reserve policy is working. What are people going to do when they finally figure out that it was a failure and we’ve been in a phony recovery?

Highlights from the interview:

“They’re just still little cubs. I mean, they haven’t really matured into full-blown a bear yet. They have no idea just how bad it’s going to be. It’s going to be awful.”

“Do you guys remember the financial crisis of 2008? Did you think that was bad? This is going to be worse.”

“It’s not necessarily going to be concentrated in the stock market. See, I think that the government, the Federal Reserve, their main goal is to make sure that the stock market doesn’t collapse again, to make sure the real estate market doesn’t collapse again, and they may succeed. But only by sacrificing the dollar. So we’re going into a currency crisis, and this crisis is going to be much bigger than a financial crisis. The impact it’s going to have on the average American, on his standard of living, on his way of life is going to be much more profound. And sure, people won’t lose as much money in their stock portfolio, but if they try to sell their stocks and spend the money, the purchasing power that they lose is going to be much greater then what was lost in ’08.”

“The dollar only started to rally because everybody believed the Fed’s program actually worked, that we had a real, sustainable recovery, that the Fed could actually normalize policy, raise interest rates, shrink its balance sheet, and everything was going to be fine. That’s why the dollar started to rally…Now people are just beginning to realize that that wasn’t true – that the policy didn’t work. If fact, it not only didn’t work, it made everything worse. We’ve dug ourselves into a deeper hole. People are going to find that out now when the Fed can’t raise rates, when they have to go back to zero and when they have to do QE4, and so I think the dollar is going to implode.”

“The dollar is falling and gold is rising when people still expect the Fed to raise rates. Imagine what is going to happen when they expect a cut.”

“Once the Fed has to admit that we’re in a recession, what are they going to do? They’re going to cut rates. They’re going to start printing up a bunch of money. The dollar is going to tank. Commodity prices are going to rise. And all of a sudden a lot of the emerging markets are going to be in better shape.”

“Even though the Fed hiked rates in December, real rates are lower today than they were in December because inflation has increased more than that quarter-point rate-hike, and that’s going to continue. So, imagine what happens when the Fed starts cutting rates as inflation is getting worse. And then real rates really tank and the dollar just drops through the floor.”

“All we’re doing now is giving more drugs to a drug addict and that is not going to solve the drug addict’s problem.”

elated:

A list of where the Big Money Boys are investing their money – George Soros Making Big Bets on Gold

A profound example of Mike’s rejection of the elites –

Britain’s “Leave” campaign opened up a 7-point lead over “Remain” ahead of a referendum on membership of the European Union an opinion poll showed late Monday, while the nation’s biggest-selling newspaper urged readers to vote to quit the bloc.

The result of the June 23 referendum will have far-reaching consequences for politics, the economy, defense, migration and diplomacy in Britain and elsewhere.

Recent polls are suggesting that momentum has swung towards the “Leave” camp, or a so called Brexit, unsettling investors. “Leave” in recent days has focused its campaign on the issue of immigration.

According to the YouGov poll for The Times, “Leave” held 46 percent support compared with 39 percent support for “Remain.” Undecided voters were 11 percent, while 4 percent won’t vote.

Last Monday The Times/YouGov had reported a 1 percent lead for the “Remain” campaign.

In another, though not unexpected, boost for “Leave,” media tycoon Rupert Murdoch’s Sun newspaper called on its readers to vote to quit the 28-member EU.

“The Sun urges everyone to vote Leave. We must set ourselves free from dictatorial Brussels,” said the tabloid, which has a circulation of 1.7 million.

Other polls published on Monday also put “Leave” ahead, while betting odds on Brexit narrowed.

An ORB poll for The Daily Telegraph put support for “Leave” at 49 percent, compared with Remain’s 48 percent, while two ICM polls, one online and one conducted by telephone, found “Out” held 53 percent support compared with 47 percent support for “In,” the Guardian newspaper, which sponsored the telephone poll said.

That compared with a 52-48 percent split in favor of “Out” in ICM polls two weeks ago, the Guardian said. Those polls excluded respondents who answered “don’t know.”

A poll published on Friday which gave “Out” a 10 percentage-point lead added to pressure on sterling and pushed the cost of hedging against huge swings in the exchange rate to record highs [GBP/]. 

ICM said it interviewed 1,000 adults by telephone and 2,001 adults online between June 10 and 13.

Including people who said they did not know how they would vote, the telephone poll showed 50 percent of people backed “Out,” 45 percent supported “In,” and 5 percent were classed as “don’t know”, ICM said.

related: 

A list of the Big Money investors and where they are directing their funds –  George Soros Making Big Bets on Gold