What role do you see gold playing in a portfolio for someone who is either nearing retirement or in retirement?
It's super important because think about what the normal recommendation is as you're nearing retirement. The recommendation is to move more into bonds and less to stocks. And bonds are the one asset classes that are the most at risk in a rising inflation environment. So the recommendation for a retiree is to own more bonds than stocks, and yet in a rising inflationary environment, that's kind of like moving out of the frying pan and into the fire. There's more risk in bonds in that environment. And I think that's where we're at [with] global inflation. You know, the Germans—who are pretty tight-fisted when it comes to managing inflation—they're at 5.2% by one measure. The Pan-European measurement of German inflation is 6% this year, right in lockstep with ours of 6.2%. These are high inflation numbers for somebody who's living on a fixed income.
And so the gold play for the retiree, you can look at it two ways: One is that it appreciates in lockstep with inflation, so you're giving yourself an inflation hedge as a retiree. And if most of your assets are supposed to be moving towards bonds, you sure do need an inflation hedge. Absolutely necessary.
And I think there's another way of looking at gold, and this is maybe a boring way to look at it, but you could say an ounce of gold buys you roughly 300 loaves of bread, and you can bare-bones feed yourself on an ounce of gold a year. And that's not all your expenses. You may have rent, you may have healthcare costs and a whole bunch of other things. So, you know, you can't say great, I've got myself covered for the next 10 years with 10 ounces. But I think you could say, what are my expenses expected over the next 10, 15, 20 years? And do I have an ounce basis to work from in a worst-case scenario where I know that I'm not gonna be eating ramen noodles. In retirement, I've got myself covered. You can create your own sort of pension fund, if you will, with ounces. So looking at how much money you spend on a monthly basis, and just making sure you have that number of ounces.
Because gold used to be $35 an ounce. And as we've devalued our currency, it moved up to $300 an ounce. We devalued our currency more, and then it was up to about $400, $500, $600 an ounce. And we've continued that same thing, where we've devalued our currency, and just the cost of living is much higher. And yet anyone who had their savings in gold can spend those gold ounces. And it's as if they've been Teflon-coated from inflation. The devaluation of our currency over the last 20, 30, or 40 years...gold has kept up with that. And if you had that reserve of ounces, you know you're not gonna run out of money. And so that's another way of framing it in terms of the retiree.