Prominent investor Rick Rule, President and CEO of Sprott Holdings, has recently predicted that a “fourfold” increase to the price of precious metals would “merely” be a reversion to the mean, given that the current share of gold is 0.5% and the long term average is 2.0% (4X).
In a recent interview conducted by Kitco, Rule said that, “JP Morgan had estimated that in 1981, at the top of the cycle for precious metals, over 5% of the savings and investment assets in the US were denominated in gold”. That would represent a 1,000% (10X) increase, but Rule is predicting only a reversion to mean of 400%.
Link to excerpt: Rick Rule Explains Gold & Silver Reversion to Mean 400% Increase, Reversion to Peak 1,000% Increase https://www.youtube.com/watch?v=45hPNt7ff1g&ab_channel=GoldSilverIndex
“The market share of precious metals is 0.5%, that is to say 0.5% of savings and investments products in the US is in precious metals or precious metals oriented assets. The 40 year mean is 2%. If acceptance of precious metals and precious metal related assets merely reverts to mean demand increases fourfold. And that’s precisely what I think is going to happen.”
Transcript:
“Quantitative easing. If you and I did it, it would be called counterfeiting. It’s producing more specious currency units. I don’t know about you, but when I was brought up producing more of something at zero cost from zero utility was inflationary. It doesn’t make the existing stock more valuable, worse debt and deficits.
“I can’t speak to canon your country dollars, but in my country, we have $32-Trillion in on balance sheet liabilities and $100 trillion net present value of off balance sheet liabilities. It’s $130,000,000,000,000 at the federal level. We service that debt with a deficit, with a budget that’s in deficit to $2-Trillion a year.
“I mean, that makes you even nervous about the debtor. The US. Government. But it gets worse. Negative real interest rates.
“Nothing could be more concerning about the strength of US. Dollar denominated savings products than the government’s explicit guarantee that if you loan them money for ten years, you will end up poorer than when you started. That’s the first government guarantee in my life that I have faith that they’re going to follow through.
“The fourth is simple market share precious metals and precious metals related assets. Kitco will love the statistic, by the way. The market share of precious metals and precious metals related assets is one half of 1% MUAs, which is to say one half of 1% of savings and investment products in the United States are in precious metals oriented assets.
“The four decade average 2%. If acceptance of precious metals and precious metal related assets merely reverts to mean demand increases fourfold. And that’s precisely what I think is going to happen.”
Link to original Kitco interview: https://www.youtube.com/watch?v=doFlxY1–Yo&ab_channel=KitcoMining
