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Dear Readers,

Oh, they scratch the earth, and it tumbles out,
More than your hands can hold,
For the hills above and the plains beneath
Are cracking and bustling with gold.

Why not start with a refrain from a Canadian folk song about the Klondike gold rush. I’ll explain more in a moment.

Yes, today we cover gold.

Surely, you’ve noticed the performance of anything and everything related to it recently.

In fact, between September 9th and time of writing, gold, priced in US dollars, has gone up by almost $100 per ounce. It has gone up against all currencies in fact – it’s in a proper bull market.
Source – Reuters

We are in “uncharted” territory indeed. I mean, that’s not normal right? Surely something’s got to give here.

Gold is an emotional asset. By that I mean it’s something that looks very pleasing to the eye, people like to hold it or wear it as jewelry. And it has a strong cohort of investors who swear by it. And humanity has a long history of using it as the basis of its money system.

Let’s look past all that for a moment. Are there other more prosaic reasons why gold could indeed continue to move higher in price?

We shall look at these today.

Firstly though, some exposition.

Earlier I mentioned the Klondike gold rush – but if you’re not Canadian, you may be unfamiliar with this interesting episode from history.

The Klondike Gold Rush was a migration by an estimated 100,000 prospectors to the Klondike region of Yukon in northwestern Canada, between 1896 and 1899.

Gold was discovered there by local miners on August 16, 1896; when news reached Seattle and San Francisco the following year, it triggered a stampede of prospectors.

Boom towns were created to accommodate the surge of people – Dawson City being the most famous of them – where newly rich prospectors came to spend their money on drink and gambling.

As the story goes, an American prospector named George Carmack along with two Indigenous men named Tagish Charlie and Skookum Jim found Bonanza Creek, a tributary of the Klondike River. Allegedly gold was simply lining the shores, out in the open.

The local tribes had no use or demand for it and so it just lay there. It led to one of history’s biggest gold rushes as tens of thousands rushed to stake their claim.

The question now is: are we about to witness – metaphorically – a similar stampede into gold once again? I will lay out a scenario here, using a little bit of real estate cycle history and certain macro events happening now.

If this comes to pass, it will result in an epic bull market top for this asset. You can’t afford to be on the sidelines if that’s the case.
All that glitters IS gold.

The natural view of gold is as a hedge against inflation. If inflation moves higher, then gold can hedge that loss of purchasing power as its price moves higher in times of higher inflation.

That’s somewhat accurate. However, take a closer look at official figures for inflation globally. I’m not saying you can fully trust them but as an overall trend it does tell us something.

If central banks were seriously worried about inflation being too high, then they would try to get ahead of it and raise interest rates, much like they did two years ago. The thing is that rates are falling!

Yes, inflation is sticky but according to these central bankers, comfortably within their recommended band and thus they have the room to drop official cash rates.

But as I stated earlier, gold is still on an absolute tear. And this is where things start to get potentially interesting.

Let’s take stock now of where we are. We are rapidly approaching the ultimate peak of US land prices. Only those who study the land market would be privy to that because such things are not measured or reported on.

That means we have history as our guide as to what might happen next and when to expect it.

In brief, we would expect greater credit creation – with that credit moving into the more speculative areas of the economy – whilst underlying economic data gets worse. And central bankers are today large enablers of this dynamic.

And thanks to what happened last week on 17th September, we have a market set up.

US Fed chairperson Jerome Powell announced a long-awaited twenty-five basis point cut to official US interest rates.

He said that inflation had been contained, and he notes higher consumer spending. That’s ‘good’ news for the US economy. He also said, “downside risks to employment have risen.” That’s ‘bad’ news for the US.

Overall, the message is that the balance of risks has shifted enough and a narrow majority of FOMC participants see that process extending to one or two additional cuts this year. And it’s that part that is good news for assets like the stock markets.

It is a starting gun that echoed across the world, and the message it’s sending is clear.

The US Fed will place an explicit focus on employment over inflation, prioritise jobs and growth using cheaper money, a weaker dollar, and an expansion of easy monetary policy.

Right on time. Again, the benefit of real estate cycle knowledge is so advantageous to those who know.

We will now witness global capital shifting. The era of restrictive policy is ending.

Politics will reinforce the momentum. President Trump wants strong growth heading into the midterms, and the Fed is now aligned with that objective. Fiscal and monetary policy are pulling in the same direction to sustain expansion.

But if your investment portfolio is exposed to any of this – hang on!

But wait? Didn’t I say this would be about gold, and its potential explosive move higher? If stocks, bitcoin and cryptos, and cheaper loans pushing the land market even higher, why would anyone even want gold?
Not the people you want in charge.

Fair call. Let me spell out my scenario.

You see, in the wash of this Fed announcement, there was one outlier. One governor voted to have fifty basis points of cuts today. In fact, it’s becoming apparent that this same governor actually wants 50bp worth of interest rate cuts in September, October, and December!

And it’s the same newly elected governor that’s causing a lot of angst amongst economic observers.

Here is the name of the official: Stephen Miran.
Source – Indian Express
The Senate has approved one of President Donald Trump’s top economic advisers for a seat on the Federal Reserve’s governing board, giving the White House greater influence over the central bank just two days before it is expected to vote in favor of reducing its key interest rate.

This appointment comes hot on the heels of Trump’s failed attempt to remove US Fed governor Lisa Cook.
Source – BBC

As stated, gold hit US$3700. Is it possible this is related to fears of stagflation, political melding with the US Fed, real rates heading negative again, and bonds unable to keep pace with inflation?

A 40% YTD move higher for gold suggests these are legitimate fears today. Leaving equity markets in the dust. Face facts here, tariffs have brought about stagflation fears, Trump’s meddling with the independence of the US Fed appears true.

How does that affect the Treasury and bonds markets? Along with the dollar sliding lower.

What if the pressure on job hiring continues to worsen? And inflation remains sticky, not transitory? Falling yields and stubborn inflation that the US Fed is prepared to now tolerate is a one-two punch that places downward pressure on the dollar and turbocharges gold.

You must pay close attention to what I’m about to say.

Between now and the peak of the real estate cycle, the news will be dominated by the unstoppable rise of sectors like crypto and US tech, as financing costs continue to come down.

This will force the majority sitting on the sidelines to vote with their emotions as their fear takes over because, they are missing out. It’s a classic case of FOMO and it’s the one emotion that powers all bubbles to their eventual peak.

I truly believe this to be fact. Here is another fact I believe.

The news concerning the worsening economic data will be summarily ignored.

That is why my scenario for gold is for it to exceed US$5000 an ounce at its ultimate peak.

When should we expect that ultimate peak? How will you know when the land markets in the US have topped out, and start to fall? When is the best time to be in the markets and just how do I time it?

These are vital questions for your financial future.

A quick way to answer them is to become our latest Boom Bust Bulletin (BBB) member. Learn the secrets behind the economy’s hidden order and interpret the news like I have here by viewing the world through the lens of the 18.6-year Real Estate Cycle.

Thanks to my knowledge of history, I’ve been able to write to you in black and white, since I started writing the BBB in 2019 in fact, about what to expect come this time in the cycle.

From a falling US dollar to the over-the-top speculative credit creation fuelled by an easing US Fed, the very fact it has all come to pass stands testament to how much of a market edge you can possess by using the BBB to turbocharge your land market research.

As our newest BBB member, you can go back over all my past writings to see for yourself.

It is those who position themselves correctly now who stand the best chance of making, and then safely banking, the potential profits on offer from the seemingly unstoppable rise of gold.

And much like this time last cycle, lower yields invite foreign investors to hedge away their dollar exposure, draining support for the American currency while reinforcing flows into gold.

And it’s happening again now.

So don’t wait. Use each monthly edition of the BBB to rapidly increase your knowledge of the real estate cycle and the weekly video catch ups to stay ahead of all the news as it pertains to the turning of the cycle.

Good as gold!

Sign up now.
Best wishes,

Darren J Wilson
and your Property Sharemarket Economics Team

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This content is not personal or general advice. If you are in doubt as to how to apply or even should be applying the content in this document to your own personal situation, we recommend you seek professional financial advice. Feel free to forward this email to any other person whom you think should read it.