Diving into our investment themes…

Yesterday we discussed a system for building consistent wealth.

The system is rather simple. If we invest a reasonable amount of money each and every time we earn income, we’ll automatically grow our wealth and create financial security.

The big question is – what should we invest in? And to that I proposed seven different investment themes. They are:

• Bitcoin
• Gold
• World-Class Insurance Stocks
• Top-Tier Energy Stocks
• Gold Royalty Stocks
• Consumer Inflation Hedges
• High-Technology Stocks

Let’s talk about the ‘why’ for each of these. We’ll hit each from a high level – starting with Bitcoin and gold today.

Bitcoin

I see Bitcoin as a premier reserve asset that can also serve as independent money. In fact, Bitcoin is a payment network and a currency wrapped into one. To my knowledge that’s a first in history.

Believe it or not, bitcoins are far more scarce than gold. And that scarcity is guaranteed by open-source computer code. This makes for a transparent system.

Thus, we know exactly how many bitcoins are in circulation at any given time. We also know that there will only be 21 million bitcoins ever created. And we know that the very last bitcoin will be mined in the year 2140.

This level of transparency puts everybody on an even playing field. There are no insiders in the world of Bitcoin.

By the way – 19.7 million of those 21 million bitcoins are now in circulation. That means 94% of all the bitcoins that will ever exist are already here. We’re going to spend the next 116 years mining the last 6%. This shows us just how scarce this asset is.

Let’s quantify this for a minute…

The most recent estimates suggest that there are 341 million people in the United States today. If everyone in the US wanted to own Bitcoin, there are only enough for each person to have 0.06 bitcoins.

And that’s just in the US. The number gets much smaller when we factor in the global population.

Of course, this degree of scarcity only implies value if Bitcoin is useful. And that’s where the network design comes into play.

The Bitcoin network is not owned or controlled by any corporation, government, individual, or group of individuals. Instead, it’s governed by open-source computer code.

That means if we hold our bitcoins in a self-custody wallet, we’ll always be able to send money to anybody at any time. There’s nothing anyone can do to stop our transactions or freeze our wallets.

I see that as immensely valuable in a world where trust is fading and geopolitical tensions are as strained as they’ve been since the world wars.

So the question we have to ask is this:

In this volatile world we find ourselves in, will people (and institutions) want to hold value in an asset that’s fully under their control and no others? In an asset that’s impervious to inflation, censorship, seizure, and arbitrary restrictions?

If the answer is yes, they have only one choice. Bitcoin is the way.

I suggested back in November 2022 that Bitcoin would be worth well over $100,000 within five years. Bitcoin traded around $16,500 at the time – so such a statement may have sounded crazy.

Fast forward to today and Bitcoin is hovering around $67,000… and it’s building energy for the next surge higher.

So it’s not too late to begin accumulating.

My position is simple. The future of finance will consist of two types of people – those who own Bitcoin and those who do not.

Gold

Gold is the world’s oldest money. And there’s a liquid market for gold in every country on this planet – including here in the US. That means we can turn gold into cash almost instantly whenever we need to.

Our government has tried its best to downplay gold over the last 100 years or so… but don’t be fooled.

There’s a reason why every major central bank in the world holds gold on its balance sheet. And many central banks have been buying gold hand-over-fist in recent years.

The official records show that central banks bought 1,082 tons of gold in 2022 and 1,037 tons in 2023. Respectively, that equates to $76.4 billion and $73.2 billion worth of gold purchases at current prices.

This of course begs the question: why?

Why are the central banks loading up on gold? Is there something we should know about?

It’s still in the realm of speculation, but rumors suggest that the BRICS bloc is developing a gold-backed settlement system for world trade.

Such a system would re-monetize gold all over the world. And then all the gold on central bank balance sheets would become far more valuable overnight.

The BRICS bloc is an alliance between Brazil, Russia, India, China, South Africa, and now six other member countries. It represents about 45% of the world’s population.

We know that the BRICS countries want to launch their own financial system. Their goal is to conduct finance and trade outside of the US dollar. That’s been in the works for years now.

I haven’t seen anything confirming that the BRICS system will be gold-backed. But it would make sense. Basing their system on gold would add an element of trust and credibility.

So it looks like the central banks may be preparing for the re-monetization of gold on the world stage. That would explain their record level of gold purchases in recent years.

The bottom line is this…

Gold has been on a tear this year. It’s currently trading at an all-time high near $2,300 an ounce today… and it’s going much higher if the BRICS announce a gold-backed system.

So it’s not too late to begin accumulating – same as with Bitcoin.

To my way of thinking, Bitcoin and gold form the cornerstone of a robust asset portfolio. Next week we’ll cover our other investment themes.

-Joe Withrow

P.S. Don’t forget that the Financial Consistency Bundle is available until tomorrow at midnight Eastern. It provides all the specifics around portfolio construction – including how to buy and store Bitcoin and gold and navigate the equity markets.

More information on the bundle right here: The Phoenician League’s Financial Consistentancy Bundle