Thursday , 28 March 2024

Do You Have Enough (Any?) Gold or Silver to Meet Living Expenses During a Time of High Inflation? Here’s What You Need

NOone is expecting rampant inflation. After all, the CPI is low with nothing happening in spite of all this money printing. While there has been no fallout I think that is the critical point. You cannot do these kinds of things we are doing forever and not experience any consequences. Sooner or later there are going to be consequences to what we are doing, and my fear is that it is going to be nasty, catch a lot of people off guard, and really hurt our society. That is the bottom line and why I am buying gold and silver, still, to this day. Words: 795

So says Jeff Clark in an interview* with Chris Martenson as reported in edited excerpts from an article** by Adam Taggart entitled Jeff Clark: So How Many Ounces of Gold (or Silver) Should You Own?.

 [Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), may have edited the article below to some degree for length and clarity – see Editor’s Note at the bottom of the page for details. This paragraph must be included in any article re-posting to avoid copyright infringement.]

Taggart goes on to say, in part:

This week, Martenson talks with Jeff Clark, Senior Precious Metals Analyst at Casey Research in which they tackle many of the questions weary precious metals investors are wondering [about] after enduing the volatile, yet range-bound, price action of gold and silver over the past year, such as:

  • Have the fundamentals for owning gold & silver changed over the past year? No
  • What are they? currency devaluation/crisis, supply-chain risk, ore grade depletion
  • How should retail investors own gold? Mostly physical metal, some quality mining majors (avoid the indices), and ETFs only for trading
  • Is gold in a bubble? No
  • Could gold get re-monetized? Quite possibly
  • Where is gold flowing? From the West to the East. At some point, capital controls will be put in place.

Clark says:

‘What the politicians are doing is the exact opposite of what they need to be doing. We continue adding to our debt, we continue raising the debt ceiling, we continue deficit spending, we continue borrowing money, and, of course, we continue printing money. We are doing the exact opposite of all the things that would lead us away from inflation. So yes, I think that is an important point.

I will add that inflation has occurred very quickly, very rapidly, very suddenly many times in the past, just in recent history. If you look back at the high inflationary times, just in the past 100 years here in the U.S., many of those that hit 12%, 14%, 15% — two years prior to then, the CPI was completely benign. It was 1%, 2% – I think at one point it was 4% – and then all of a sudden within 24 months, it was 12%, 14%. So it can happen very suddenly, and my fear is that is what is going to happen this time.”

For these reasons and others, Clark strongly believes everyone should have exposure to gold and silver as a defense for preserving the purchasing power of their weath. The key question is: how much exposure? To quote Jeff:

“You want to focus on how many ounces you own, not necessarily looking at whether the price is $5 higher today than it was yesterday. How many ounces should you own is really the question you want to ask yourself, so you can focus on how much you are really going to need, and the amount really comes down to this:

  • How are you going to protect your standard of living if we get some kind of runaway inflation? Let’s say it’s not runaway hyperinflation; let’s just say it’s high inflation, 10%, 15%. Remember it was 14% in 1980, so the odds of us getting high inflation are realistic.
  • If you plan to use that gold to protect your standard of living, you are going to need about 2/3rds of a [troy] ounce of gold for every $1,000 of monthly expenses….”

Below are two tables — one for gold and the other for silver — Clark offers to help investors calculate the requisite ounces needed to protect against rising inflation over time.

Ounces of Gold Needed to Meet Expenses During High Inflation
Monthly expenses in US dollars Monthly expenses in gold, oz* Inflation Duration
6 months 1 year 18 months 2 years 3 years 4 years 5 years
$500
0.31
1.9
3.7
5.6
7.5
11.2
15.0
18.7
$1,000
0.63
3.8
7.5
11.3
15.0
22.5
30.0
37.5
$2,000
1.25
7.5
15.0
22.5
30.0
45.0
60.0
75.0
$3,000
1.88
11.3
22.5
33.8
45.0
67.5
90.0
112.5
$4,000
2.50
15.0
30.0
45.0
60.0
90.0
120.0
150.0
$5,000
3.13
18.8
37.5
56.3
75.0
112.5
150.0
187.5
$10,000
6.25
37.5
75.0
112.5
150.0
225.0
300.0
375.0
$20,000
12.50
75.0
150.0
225.0
300.0
450.0
600.0
750.0
*Based on $1,600 gold price

 

Of course many of us own silver, too. Here’s how many ounces we’d need, if we saved in silver.

Ounces of Silver Needed to Meet Expenses During High Inflation
Monthly expenses in US dollars Monthly expenses in silver, oz* Inflation Duration
6 months 1 year 18 months 2 years 3 years 4 years 5 years
$500
17.9
107.1
214.2
321.3
428.4
642.6
856.8
1,071.0
$1,000
35.7
214.3
428.5
642.8
857.0
1,285.6
1,714.1
2,142.6
$2,000
71.4
428.5
857.0
1,285.6
1,714.1
2,571.1
3,428.2
4,285.2
$3,000
107.1
642.8
1,285.7
1,928.5
2,571.4
3,857.0
5,142.7
6,428.4
$4,000
142.9
857.1
1,714.2
2,571.3
3,428.4
5,142.6
6,856.8
8,571.0
$5,000
178.6
1,071.4
2,142.8
3,214.3
4,285.7
6,428.5
8,571.4
10,714.2
$10,000
357.1
2,142.6
4,285.0
6,427.8
8,570.4
1,2855.6
17,140.8
21,426.0
$20,000
714.3
4,285.7
8,571.4
12,857.0
17,142.7
25,714.1
34,285.4
42,856.8
*Based on $28 silver price

 

The above amounts probably sound like a lot but here’s the thing: if you don’t save now in gold and silver, you’re going to spend a whole lot more later. What I’ve outlined here is exactly what gold and silver are for: to protect your purchasing power, your standard of living.

Click here to listen to Martenson’s interview with Clark (46m:01s)

*http://www.youtube.com/watch?v=HffnLAhFbgU&feature=player_embedded

**http://www.peakprosperity.com/podcast/80075/jeff-clark

[Editor’s Note: The above post may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.]

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