About this Video

• Video Title: “The US Dollar Is Going To $0!” - Gold Just Broke The Stock Market
• Channel: Graham Stephan
• Speakers: Graham Stephan
• Duration: 00:14:46

Introduction

This video discusses the recent surge in gold prices and explores its potential as an investment, contrasting it with the performance of the US dollar and the stock market. Graham Stephan analyzes the historical relationship between gold, the US dollar, and the stock market to determine the viability of gold as a safe haven asset and a long-term investment.

Key Takeaways

• Gold's historical significance: Gold has been a viable currency for thousands of years due to its inherent properties (durability, rarity, etc.). Its formal introduction into the US economy dates back to 1792.
• The gold standard's demise: The US abandoned the gold standard in 1971 due to the Vietnam War and increasing global demand for gold, allowing for more flexible monetary policy but making the US dollar's value reliant on faith.
• Gold's performance: While gold's price has fluctuated, it has generally held its value well, especially during times of economic uncertainty and inflation. It has outperformed US bonds, commodities, and global stocks over the long term in some periods, and it has historically performed well during market crashes and volatility. However, its correlation with the stock market is low, and it doesn't always outperform stocks over the long term.
• Diversification: The speaker advocates for portfolio diversification, including a small allocation to gold (5-15%) as a hedge against economic uncertainty, rather than a significant bet on a single asset class. The speaker prefers a more aggressive investment strategy focused on stocks, citing their long-term outperformance over gold.

The "gold to S&P 500 ratio" tracks how many ounces of gold are needed to purchase the S&P 500 index. A higher ratio indicates stocks are more valuable relative to gold, while a lower ratio suggests gold is more valuable. This ratio, which has been tracked since 1928, helps assess the relative value of stocks and gold, particularly during times of economic uncertainty. When the ratio shows that only 1 ounce of gold is needed to purchase the S&P 500, it's generally considered a favorable time to invest in stocks. However, the speaker notes that the ratio is not a perfect indicator and other factors should be considered.