Why Gold Will Hit $10,000 an Ounce

ASHLAND, WISCONSIN – Gold is making new highs.

As I write, it’s trading at $1,768 an ounce, its highest price – in U.S. dollar terms – since 2012.

Priced in almost any other currency, gold hit all-time highs this year. Gold needs to rise about 8% to reach all-time highs in U.S. dollar terms.

As I’ve been saying over and over again since I started writing these Postcards, we’re currently in the perfect environment for rising gold prices.

More below, but first… 

On the Shores of Lake Superior

Greetings from Chequamegon Bay, Wisconsin, on the shores of Lake Superior…

Today we drove 290 miles, and we’re close to reaching our new campsite.

I’m writing to you from a truck stop.

The kids are stretching their legs after many hours in the car. Kate is inside the convenience store buying snacks. And I’m using the break to write to you…

Some campers we met yesterday recommended the campground we’ll be staying at tonight. They said it was one of their favorites in Wisconsin.

Since we didn’t have any better ideas, we put the address in the GPS and made the eight-hour drive.

Hopefully, there are some open sites and it’s as nice as they said it would be… 

Earlier today, on our way to Wisconsin, we visited Pictured Rocks National Lakeshore.

It’s a stretch of beautiful limestone cliffs and structures on the southern shore of Lake Superior in Michigan.

It’s one of the most popular tourist attractions in the Upper Peninsula. We hiked to the three lookouts and took in the views. Here we are…

Along the way, we noticed that almost nothing is open for business in these parts, except for fast food restaurants, gas stations, and Walmarts.

We saw many closed casinos along the way. And many closed hotels. Even the Pictured Rocks Visitor Center was closed.

Not sure how Wisconsin is dealing with the virus, but Michigan is quite strict…

Perfect Conditions for a Higher Gold Price

Speaking of which, an article in today’s Wall Street Journal talks about how much money businesses have had to spend to stay open for business in these times:

A food distributor has paid $20 million for testing and plexiglass. T-Mobile US Inc. has spent $50 million on extra cleaning and safety gear. Walmart Inc. and three other big retail chains have put more than $3 billion into higher salaries, benefits and other Covid-19 measures.

Staying open during the pandemic wasn’t cheap. Big companies say they spent anywhere from hundreds of thousands to almost a billion dollars in Covid-19-related costs. Some say they expect the costs to keep rising in coming quarters, even as they face uncertain demand from consumers.

Last week, I mentioned all the “Help Wanted” signs we’ve been seeing as we travel around small-town America.

My feeling is – and the examples above back this up – businesses are going to have to “pay up” to bring employees back to work. 

Now we see how much money they’ve spent… and will continue to spend… on coronavirus mitigation…

How are they going to pay for these additional wage and business costs? By raising prices, of course.

When you combine an environment of rising prices and wages…

…with artificially low interest rates…

…with the greatest government spending spree since WW2…

…with $20 trillion of fake, printed currency from the world’s central banks – an experiment in synchronized global currency printing the likes of which we’ve never seen before…

…you have the perfect conditions for a rising gold price. And this is why gold is making new eight-year highs. 

I continue to expect gold will trade for well north of $10,000 an ounce before these trends reverse. We’ll see.

– Tom Dyson

P.S. I don’t actually see any of these conditions reversing.

Interest rates cannot possibly rise – or the U.S. government will collapse under the weight of its debt.

Central banks cannot possibly stop printing money – or the world’s financial system will cease to function.

And inflation should keep gathering momentum, until we’re reliving the 1970s.

Like what you’re reading? Send your thoughts to [email protected].

One reader shares admiration for Kate…

Reader comment: I really enjoy your Postcards. They allow me to travel vicariously with you and your family to places where I’d never go. Right now, you are showing me a slice of America that doesn’t make the mainstream news.

Kate deserves some more recognition. I think you are very lucky to have her aiding and abetting you in all your adventures. With all that she does with the food and the kids, I’d have to give her my “Tough as Nails” designation!

Tom’s response: I read this message to Kate. I couldn’t agree more. Kate is very strong. To be able to homeschool the kids, while living out of a suitcase, sleeping in a tent, cooking over a camping stove and washing in public restrooms, and driving 200 miles a day, is pretty amazing. 

Meanwhile, others offer their personal Detroit experiences after Tom visited and toured the city last week…

Reader comment: You don’t need to mention, but you need to hear so you understand. The Democrat party led the destruction of Detroit. They elected a racist mayor who actually told the whites to “get out!” The rest is history.

I was there. This is testimony of a witness. I am telling you this because of the current economic effect of the same policy continuing by the same party. You would be well to include this information in your thinking… Just saying.

Reader comment: Having been raised and lived basically all my life in the Northern Detroit suburbs, it has been amazing to watch the rebirth of Detroit.

I was born in 1964 and my parents never took me downtown except for an occasional play at the Fisher Theatre or a Tiger game or a hockey game at the Olympia. We attended and left.

When I got older, and as a teenager, we went to Tiger games slightly west of downtown. It was always shocking to see the poverty and the dilapidated buildings. We never hung out down there. Now, young people live downtown. And the rents have skyrocketed. And property values. 

Tom’s note: As always, please keep sending your questions and comments to us at [email protected]. Kate and I read every note you send us!