Bitcoin and the No. 2 cryptocurrency, Ethereum, are staging rallies that have attracted all sorts of eyeballs, including some of the biggest investors in the world, as well as regular folks just passing some pandemic time on Google.

At the same time, gold and silver appear to be breaking out of months-long consolidation patterns.

The common thread is investors seeking stores of value, with some fascination about the potential disruption of the postwar global economic, financial and security structures for good measure.

On Dec. 17, 2020, Sean Brodrick described why this is happening for Wealth Wave readers, one of three things to watch in 2021:

1. Government Spending and Central Bank Printing

The fiscal and monetary mechanisms suppressing the value of the U.S. dollar and widening the gap in inequality will continue at a faster rate than ever. Money will continue pouring in. The question is, from where?

I expect asset prices to continue inflating from the accommodative fiscal and monetary policies under Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell.

If the senate stays red after the Georgia runoffs, it will be less fiscally accommodative to President-elect Biden’s plans. But if it turns blue, there will be larger-scale government spending.

In the case of lower government spending, the Federal Reserve would take the reins by injecting money into the economy. If the government spends more, the Fed would take a back seat.

Either way, money will be added into the economy on a scale large enough to prop up markets.

Of course, these are unsustainable practices that will devastate eventually. As the purchasing power of fiat currencies erodes, precious metals will provide safety against inflation, market uncertainty and social/political unrest.

If you don’t want to buy the metal itself, look for ETFs that offer exposure either through direct ownership or companies sensitive to it.

Bitcoin’s programmed-in scarcity and anti-inflationary mechanisms make it a fresh and exciting (some might say “newfangled”) option. And it’s a real question whether “blockchain technology” represents a serious means for decentralization of all sorts of authority.

Meanwhile, gold, silver and other commodities have long histories of storing value, providing media of exchange and being processed into marketable goods. 

In his Jan. 2, 2021 piece for Wealth Wave readers, Sean, amid a fascinating history of “the economics of piracy,” offered “Five Pirate Tips for Sailing Through Today’s Tricky Financial Waters.”

Tip No. 1 was “precious metals never go out of style.” Here’s Sean: 

Gold and silver are great investments today, just as they were in Henry Morgan’s day. That’s because they continue to have real value.

But it’s not just metals. Oil is a hot commodity, as the rest of the world wants to drive like Americans. Sure, America is producing a lot more oil. That has weighed on prices. But there are still companies that can make a killing worthy of a pirate king.

Each of gold, silver and oil is a “known commodity.” Bitcoin, crypto and the blockchain could be the “change agent” we’ve been waiting for … but maybe not.

For the investors whose “Rule No. 1” is “never lose money,” that “but maybe not” part is all the relative uncertainty required.

And, as Sean notes, precious metals have been essential to economic development for centuries.

Best wishes,
David Dittman