The only time that we had an inverted 10-1 year yield spread of at least 40 basis points and gold didn't make massive gains over the following 12 months was in August 2000 when the S&P 500 and NASDAQ failed to reach new all-time highs. Still, the gold/S&P 500 ratio performed extremely well and over the following 12 months, gold gained by 1.3% vs. the S&P 500 declining by 18.5% causing the gold/S&P 500 ratio to increase by 24.3%.
It took people nearly a year to realize the truth that the S&P 500 and NASDAQ were massive bubbles, and they need to invest into gold. In July 2001, people finally figured out the truth that the S&P 500 and NASDAQ would need a decade to hit new highs. Over the following 12 months, gold gained by 18.98% vs. the S&P 500 declining by 33% causing the gold/S&P 500 ratio to increase by 77.6%.
Gold continued to outperform the S&P 500 all the way until August 2011. During the 11-year period of August 2000 through August 2011, gold gained by 588.7% vs. the S&P 500 declining by 25.49% causing the gold/S&P 500 ratio to increase by 824.4%.
There are many reasons why we believe gold will make massive gains in the upcoming months while the S&P 500 and NASDAQ crash. One of the primary reasons is the fact that in August 2000, North America had very affordable Real Estate prices. Investors who sold stocks in 2000/2001 after realizing that the S&P 500/NASDAQ bull market was over had other options of what to invest in including Real Estate at very low prices.
Today, we have the exact opposite conditions due to an Airbnb bubble. Countless thousands of leveraged up Americans have become "hosts" on Airbnb, believing it to be an easy way to earn passive income that they unrealistically expect to far exceed the long-term rental income of a normal landlord. Many of these hosts own 10, 20, or even 50 homes that they list for booking on Airbnb. During a time of free checks/direct deposits being sent out to Americans, it was very profitable to be an Airbnb host. However, in recent weeks thousands of Airbnb hosts have been complaining on social media that their bookings are suddenly down by 50%+. Meanwhile, their mortgage payments are suddenly up by 50%+!
So not only is Real Estate not a viable investment option today for investors selling their Apple (AAPL), Nvidia (NVDA), and/or Tesla (TSLA) stock before the crash, but an imminent credit/banking crisis related to Airbnb hosts going bust will send gold to new all-time highs within months. The highest quality gold explorers in top ranked jurisdictions like Nevada with the best assets and most experienced management teams will make short-term gains of well over 1,000%!
Preparing Americans for Hyperinflation
