Gold vs. the Deficit
Ben Rubin@benrbn
−0.7%
since Sep 29
The idea
I believe the deficit only gets solved one way: rates held below inflation while the dollar quietly shrinks the debt. That kind of repression has always favored hard money over paper, so gold is the core. Physical gold anchors the basket, royalty and streaming names add steady exposure without mine risk, major producers bring leverage to the gold price, and a smaller slice of juniors and silver adds torque if the devaluation trade speeds up. I keep some cash on the side and hold this for years, only rethinking it if real rates turn durably positive.
What it owns
- Profits grow faster than gold prices themselves when costs stay flat while revenue climbs with a rising metal price. · NewmontThe world's largest gold producer, so its profits grow faster than gold itself as costs stay roughly flat while revenue rises., Agnico Eagle MinesOperates in stable jurisdictions with industry-leading costs, so it captures producer profit leverage while avoiding political risk., Gold FieldsScales gold production outside North America, so its profits jump when gold rises against a shrinking dollar., Kinross GoldTrades at a discount to other major producers, so it has more room to rerate if money floods into gold stocks on devaluation., AngloGold AshantiCutting costs while cleaning up its portfolio, so it offers extra upside if its turnaround lands while gold rises on dollar weakness.27%
- Takes a cut of every ounce mined without bearing mining costs, so profits rise almost directly with gold prices. · Franco-NevadaCollects royalties from hundreds of mining projects without operating costs, so rising gold flows almost straight to profit., Wheaton Precious MetalsOwns gold and silver at fixed prices in contracts, so margins widen automatically when precious metals prices rise., Royal GoldCollects US-based mining royalties with no production costs, so it compounds as gold rises with a weaker dollar.23%
- Holds the metal directly without company risk, so it rises when the dollar weakens and gold retains its value. · SPDR Gold SharesTracks gold directly with no company risk, so it performs as long as the metal holds value while the dollar weakens., Sprott Physical Gold TrustHolds allocated bars in a vault, which matters if dollar devaluation accelerates and investors demand physical metal custody.18%
- Smaller miners swing hardest when gold moves sharply, amplifying gains in a sustained uptrend. · VanEck Junior Gold Miners ETFHolds a basket of junior miners that move hardest when gold runs sharply, spreading single-company risk across the group., Alamos GoldGrows production from stable Canadian mines, so rising gold hits a rising ounce count and compounds the devaluation bet., B2GoldMines cheaply enough to stay profitable even if gold stalls, and its margins stretch fast when gold rises on a weaker dollar.13%
- Silver historically outpaces gold during devaluation cycles, adding extra leverage to the same bet. · iShares Silver TrustHolds silver directly, which historically moves further than gold during devaluation runs in both directions., Hecla MiningA US silver miner with thin margins that fatten sharply when silver rises, so it swings hardest if the devaluation trade accelerates., Pan American SilverOne of the largest silver producers, so a devaluation-driven silver run multiplies through its profits like it does for gold seniors.11%
- Cash8%