The War On Gold Is Coming! - How To Protect Your Gold Stock Portfolio

The war on gold is coming whether you're prepared on not. In today's video, Marin goes in-depth on what exactly the war on gold is, the mechanisms behind this war, how it's likely to play out, and how you can position your gold stock portfolio to minimize the coming geopolitical risks and maximize the upside.

It's no secret that China and Russia want to own a larger supply of the world's gold. A much larger supply at that. Both countries have been aggressively buying up gold in the last decade to strengthen the value of their treasuries. Even with China being the world's largest producer of gold, they are still well behind the US and Canada in gold held in treasuries. With how much gold both countries want, and how much gold is available to buy, there is a hidden in plain sight discrepancy on where they are going to acquire this gold.

Enter the dollar swap line.

The dollar swap line helps maintain the flow of lending to US businesses and households by reducing risks to US financial markets caused by foreign financial turmoil. During international market turmoil (which we saw in 2020) the US Fed provides foreign central banks with the ability to deliver US dollar funding to foreign institutions. By stabilizing these foreign currencies with US Dollars, this positively boosts the US economy within many channels.

The swap line was set up by the Federal Open Market Committee (FOMC) where 15 nations were pre-approved to draw down US Dollars on a swap arrangement.
We refer to these countries as positive swap line nations. These countries are favored politically by the United States and hold trust with the US government.

Countries that don’t hold this trust are referred to as Negative swap line nations whereas they don’t have agreements with the United States to draw down US Dollars. And you guessed it, Russia and China are leading the way of negative swap line countries.

**Russia and China are coming after the gold in negative swap line nations. **

The nations are accelerating the war on gold because mining companies in negative swap line nations will soon face a host of issues starting with non-sellable gold into international markets. This means gold producers have to sell to the government at fixed rates and then convert prices back and forth between government manipulated price strategies in local currencies. These pricing strategies will surely go against the interests of the American government which will also have a massive effect on gold stocks which own assets inside negative swap line nations.

Of the 75 million ounces of gold produced in the top 10 countries last year, half of that gold was produced in negative swap line nations by US and Canadian mining companies. These companies ARE going to be forced to pay increased royalties, increased taxes, have more foreign government control, and are at risk of possibly losing entire mining assets to foreign control.

This means China and Russia will be looking to increase their exposure to negative swap line countries in order to obtain more gold.

Because financing, permitting, and building production facilities is such a long process, gold that is produced today was found almost 15 years ago. And with very few new good gold mines being found each year, the number of ounces of gold mined is decreasing rapidly. Gold is getting scarcer and scarcer. What happens 15 years from now if no new mines aren’t discovered soon?

A War On Gold!

As gold becomes rarer and rarer, investors would do well to become more exposed to companies with mines in positive swap line counties. And to decrease exposure in companies with mines in negative swap line countries. The political risk of negative swap line nations will have a massive effect on companies with mines in these areas.

One way we use to combat this within a gold portfolio at Katusa Research is as follows:
Private Placements - This is when a company creates shares to purchase and sells these shares directly to investors, which is done outside the regular stock market. The shares are created when a company needs to raise funds to finance advanced exploration, development, or to build the mines. Warrants and shares are then issued to investors. We consider private placements one of the absolute best ways to invest for family offices or accredited practices as the warrants can be a huge money-making advantage.

Warrants are simply a derivative that gives the owner the right, without obligation, to buy or sell an equity at a certain price before it expires.

If you found this video informative, check out some of our other great educational videos:

Preparing For Chaos
https://youtu.be/AuQ-uCtmNz0

US Dollar Collapse
https://youtu.be/oLrB5c0W7Og

Silver Short Squeeze
https://youtu.be/u4VKCLONPLM

#warongold #investing #finance

Видео The War On Gold Is Coming! - How To Protect Your Gold Stock Portfolio канала Katusa Research