Why do you must own gold? I explain it in 3 simple steps:
1. The Fed Funds rate prior – 2009.
2. My opinion about EVERYTHING Ray says about gold. ๐คฉ
3. You must own gold because of negative interest rates and money printing.
To understand the first step you need to know how the Fed's balance sheet works: The Fed prints money to buy treasury bills which go onto the asset side of the Fed's balance sheet, but all the money they print is a matching liability and, why is it a liability? Because it's an IOU.
Another thing I Explain to help you understand is the discount window, which is the Fed saying to all the banks inside and outside of the system that if they get into trouble and no other entities will lend to they in the open market, they can come to the discount window, give us collateral and we will give they however much money they need. The rate will be a little bit higher than the Fed Funds rate, BUT IN THAT WAY THE FED IS THE LENDER OF LAST RESORT! ๐ซ
Ray Dalio is one of my favorites investing legends and it´s awesome to hear him talking about gold the exact same way YOU and I do, although Talking Heads in the media get gold COMPLETELY WRONG. They look at it as though it's a speculative asset comparing it to stocks, Bitcoin and something where you're buying it because you think the price is going to go up, and that is not why you buy gold! ๐คจ Gold is an insurance policy period, if the price goes up is fantastic but the main reason you buy it IS TO MAINTAIN YOUR PURCHASING POWER.
Finally, I clarify why The Fed doesn't have a discount window, which means they don't have a ceiling for the interest rates other than additional money printing and, THAT IS WHY YOU NEED TO OWN GOLD IN 2020! ๐ค
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