After January, Gold & Silver Won’t Protect You The Way You Think. Here Is Why. | Rick Rule

Описание: We need to rethink precious metals. Gold’s at new highs, silver is stirring, and many think they’ve found a “can’t lose” hedge. The uncomfortable truth: most investors buy metals for the wrong reasons, at the wrong time, and with the wrong expectations. This matters because the “anti-dollar” identity is crowded in conversation, but actual allocations to gold remain tiny — and that mismatch is often where big moves begin. 🪙

Is gold crowded? Not really. Headlines and social chatter scream “anti-dollar,” but the marginal buyer has mostly been foreign central banks, not a retail panic. ETF flows from retail only really picked up about 20 weeks ago. Allocation data is the real reveal: precious metals and related securities still account for less than 0.5% of U.S. portfolios versus a long-term mean near 2%. If gold’s share merely reverts to that mean, you’re looking at a multi-fold increase in demand — hardly the mark of a mania. People confuse price with positioning: higher prices don’t prove broad ownership.

But ownership alone won’t make gold work. You must see gold as a referendum on the dollar and, crucially, on bond yields. The argument isn’t “gold will go up” but “real returns from bonds can fail.” If safe assets offer negative real returns, gold’s role changes from speculative to preservative.

Rick Rule frames the math bluntly: federal obligations — roughly $37T on-balance and about $130T off-balance — versus about $5T in gross federal income suggest the political path out is currency debasement. That doesn’t require the dollar to collapse against other currencies; it only needs to buy less in absolute terms. Rule calls out the “CP lie” — that CPI captures true purchasing-power loss — and argues his personal basket shows about an 8% compounded decline in buying power, while the 10-year Treasury yields roughly 4.5%. That gap means a guaranteed negative real return: holding “safe” bonds can cost you about 3.5% of wealth annually in real terms. Gold doesn’t need to outrun everything; it just needs to avoid that guaranteed erosion.

Historically that dynamic mattered most in the early 1970s — the last sustained period when purchasing power deterioration outpaced Treasury yields, and the last time dollar savings truly failed. The parallels today aren’t exact, but they’re concerning. There’s more technology and a more global economy now, and labor-force participation dynamics have improved. But debt/GDP has jumped from roughly 35% in 1970 to about 120% today. Government size, demographic pressures, and concentrated market gains (seven or eight mega-cap tech names carrying much of the S&P) create fragility. Political patterns matter too: when obligations grow beyond sustainable means, inflation is often the chosen path to reduce real liabilities. That’s the historical playbook Rule warns about.

Silver behaves differently. Rule distinguishes gold as wealth preservation and silver as speculation. Gold is the ballast when real yields disappoint. Silver tends to amplify the move when generalist investors finally enter the space; historically, mid-to-late cycle rushes into metals see silver outperform gold. Recent silver action suggests that moment may be approaching, and small, high-quality silver equities can soar if capital floods the sector — but that upside is leverage to a momentum narrative, not a substitute for risk management. Not all silver names qualify; the tiny club of genuine, well-capitalized silver producers is what matters.

The central takeaway: owning gold is not trying to get rich; it’s opting out of guaranteed negative real returns. Owning silver — or tiny silver miners — is a bet on how crowded the trade becomes when the crowd shows up. The biggest mistake people make with precious metals isn’t buying them. It’s expecting them to perform the wrong job when economic math stops cooperating. Know what you own, why you own it, and what you expect it to do.