The One Precious Metal You Shouldn’t Buy

A lot of readers have been asking me lately whether they should invest in platinum. After all, platinum is a precious metal like gold, right?

In fact, it’s often referred to as “rich man’s gold,” just like silver is “poor man’s gold.”

This terminology is misleading. There’s only one kind of gold: gold.

The case for investing in gold is completely different than the case for investing in platinum. Gold is best thought of as a currency, not a metal or a commodity (though it is also a metal or a commodity). The price of gold is driven by the type of macroeconomic factors that move currencies. And it serves as a safe haven against inflation and deflation, which of course makes it my preferred “insurance” for the Super Crash.

Platinum is a completely different story.

The price of platinum is primarily driven by its use as an industrial metal – and it’s so volatile that it’s a terrible long play.

In fact, I strongly suggest that you short it.

Here are my recommendations…

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Wall Street Lies, But The Yield Curve Doesn’t

There are a number of economists and strategists stubbornly clinging to their belief that the U.S. economy is strong and that markets have decoupled from economic fundamentals. I would respectfully suggest that markets decoupled from economic fundamentals a long time ago when the S&P 500 rose three-fold since March 2009 while the economy barely grew at 2% per annum and are now merely returning to the mean.

But that won’t play out in a straight line. Nothing ever does in a complex system.

So it’s not surprising that this week has been a very strong one for the U.S. markets and for oil (on track to end this week with solid gains, thanks to a three-session rally). And it’s no shock that Wall Street is starting to make encouraging noises about “recovery.” But when did those folks ever tell you the truth?

There is one signal that never lies. It always lights up red when the system starts to fail.

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