 What if I were to ask you, which did better in 2020? Gold or the S&P 500? Think about it. Don't check a chart. Just think about it for a moment, anecdotally. If you guess gold, you're right. For the record, as of the time of this recording, the S&P 500 is up 16 spots 66%, whereas gold is up 23.7% on the year. And it was up higher at one point before it corrected to now what appears to be a bottom going into 2021. Now you might be saying, you know, Bob, don't go, don't go that fast. The NASDAQ composite is up more than 40%. Fair point. We're going to talk about that later on, because what matters when you invest is your risk versus your reward. So we're going to talk about the four D's in this video. What are the four D's? One, the dollar. Gold is priced in U.S. dollars. So it's critical that we understand where the dollar is relative to the price of gold and to identify where it might be going. Did you know that the U.S. dollar is down nearly 6% on the year for 2020? And we're going to go over a chart later on where it shows that in all probability, it's going a lot lower to debt. We're going to talk about the debt and how that plays into the wise behind gold moving significantly higher and an all probability to new all-time highs in 2021. The third D is decoupling. The world is changing dramatically. We have a COVID crisis. We have a crackdown on Hong Kong. We have threats from China to invade Taiwan. These are all catalysts that have already sent stocks lower and gold up higher. The only thing that saved the stock market was the Federal Reserve. But all we need is a serious catalyst, a geopolitical risk to send stocks lower and gold shooting up higher. The fourth D that we're going to talk about is doubt. There's doubt that's continuing to rise at current of as to the ability of the Federal Reserve to maintain control on interest rates. If the Federal Reserve cannot control interest rates, folks, that means that stocks will be unable to move up higher. If stocks correct, that means it will be a risk off environment. That means traders will sell stock and they will buy precious metals whether it be gold, silver. I love silver as well just as much as I like gold. But for the purposes of this commentary, we're going to reference gold. So let's talk first about the first D, which is the US dollar and how what happened on August the 15th, 1971 changed the world. Take a listen. Strength of a nation's currency is based on the strength of that nation's economy. And the American economy is by far the strongest in the world. Accordingly, I have directed the Secretary of the Treasury to take the action necessary to defend the dollar against the speculators. I directed Secretary Connally to suspend temporarily the convertibility of the dollar in the gold or other reserve assets except in amounts and conditions determined to be in the interest of monetary stability and in the best interest of the United States. Now, what is this action, which is very technical? What does it mean for you? Let me later rest the bugaboo of what is called defaluation. If you want to buy a foreign car or take a trip abroad, market conditions may cause your dollar to buy slightly less. But if you are among the overwhelming majority of Americans who buy American made products in America, your dollar will be worth just as much tomorrow as it is today. The effect of this action, in other words, will be to stabilize the dollar. Now, folks, what you just saw President Nixon do back on August the 15th, 1971, was by far the most bullish case for gold and the most bearish catalyst for the U.S. dollar that the world has ever seen. You'll remember if you're over the age of 40, 50 years old, that back during those times, a father could support a family of five, six kids, send them all to college. Maybe they had a loan. The mother certainly didn't have to go to work, but that all changed after that policy decision. Why? It's because President Nixon, by his own admission, despite his bugaboo about the ability of the consumers to buy the same amount of goods if they bought American, he admittedly devalued the U.S. dollar. And then at the same time, he was negotiating to open up China where we ultimately ended up exporting a tremendous amount of our jobs. So, so much for buying American. So, what I want to draw to your attention is this chart here. This is the value of one U.S. dollar from 1971 to present day. And you could see on this chart here that after that announcement in 1971, the U.S. dollar just dropped like a stone and it has never, ever looked back and it's only going to get worse. And why am I spending so much time on the U.S. dollar? It's because gold is priced in U.S. dollars. So, as goes the U.S. dollar, so goes the price of gold. That's why it's so important. And at the end of this video, I'm going to show you a chart. I'm going to give you the technical analysis of how the U.S. dollar looks as we move into 2021. You're not going to want to miss it. So, stick around. Let's go to the second D, which is debt. Now, ever since 9-11, the United States has been printing money hand over fist. And this chart here is from the Federal Reserve. And they have been printing money since 2000. They had kept prior to 2000 rates artificially low. They jacked them up too quickly. That burst the dot com bubble. And despite all the talk of economic recoveries since 2000, we've never really recovered. And we only blew more and more bubbles vis-a-vis the Federal Reserve's printing of more and more debt. Now, I'm going to show you a chart at the end of this video when we go to the doubt phase of as to whether or not this current stock market rally can continue. I'm going to show you a scary setup that's unfolding in the debt market, which is quite contrary to what you would expect to see with the debt bubble ripping through the ceiling with no end in sight. So stick around because this is only going to get worse in 2021. What does that mean for the price of gold? It's very, very bullish because they're killing the U.S. dollar and they're inflating a new bubble which is set to explode in the stock market in the debt market. Now, real estate is becoming not a bubble yet, but it's beginning to expand. And we could expect that at some point in time to blow not for the first time, but for the second time in the past 15 years. Let's move forward to our third day. Now, prior to the Trump administration ever taking office, the Chinese were behaving very, very aggressively. They were building manmade islands in the South China Sea, which they promised never to militarize, but ultimately they did. And that was under Obama. Then fast forward to the Trump administration when tariffs became the weapon of choice by the Trump administration to try to get a level playing field with the Chinese. And then you had the ratcheting up of tensions given the fact that the Chinese ultimately did nothing in an effort to try to avoid the spread of COVID outside of mainland China, although they did limit the expansion of the disease within China. Then when you fast forward to the crackdown in Hong Kong, the ratcheting up of tensions between Taiwan and mainland China now with threats and even territorial incursions now both by air and by sea by mainland China into Taiwan, the stage is being set during this period of U.S. turmoil, whether it be the elections, whether it be this economic catastrophe that we find ourselves in, whether it be COVID. It's a mixture. It's a cauldron of weakness for the United States and a perfect time for the Chinese to take action over in the Taiwan Straits. They have already made an incursion into Northern India, which failed, but they did it nonetheless. And you could just scroll through here, the South China Morning Post, and you could see that we continue to blacklist Chinese firms that are associated with the Chinese Communist Party. And in closing on the decoupling issue, there are opportunities that are emerging in Vietnam and in India. I'm going to share with you a chart of each of those markets at the end of this video. So stick around because this decoupling is providing us opportunities not just in gold, but in emerging markets as well. So we'll talk briefly about that. We'll talk more about it more broadly in future broadcasts. So let's move on to our fourth D and that is doubt. And the doubt is, can the U.S. stock market continue this trajectory higher into 2021? Let's take a look at some analysis of why I think it's going to be very, very difficult, but not impossible, for the stock market to continue this trajectory higher. Let's begin with the Schiller PE ratio. You can see that a current day, we're at 33 spot 65. And you may be saying yourself, Hey, listen, Bob, it's been higher. You look at your own chart. It was much higher back in 2000. That's absolutely correct. But did you know that we are well above the black Monday highs going back to 1987? We're above the highs of black Tuesday going back to 1929. Add to that this chart. Now this chart here shows you in red companies that are overvalued with a PE of 20 or greater on the S&P 500 in blue fair value and in green undervalued. And you could see that the S&P 500 is now well past the highs of 2000 in terms of the number of companies that are overvalued with a PE of 20 or greater. We have far surpassed the dot com bubble. So right now we are in no man's land and it could be as simple as a bad treasury auction for this to come completely unwound, or it could be a geo political event. But can we proceed higher? We've seen crazier. We have never seen the amount of debt printing money printing that we have seen anytime like this in history. So yes, can the insanity continue? Absolutely. Let's continue. Here's a chart of the S&P 500 on a quarterly timeframe. Now we're going to talk about this and with two points to be made. One, is there more upside here? Two, would I rather from a risk reward perspective buy gold or buy the S&P 500? Let's talk about it. So the quarter is very close to an end and we are trading within a strong, very strong uptrend channel. That has not been broken yet. The however is, is that we are trading up and into the upper band of resistance, the upper band of the trading range. So when you look at past history, once we've done that, we've either retraced all the way back down to or just shy of the lower band of support. So is it possible for us to continue higher and break out above this upper band of resistance going into Q1 2021? Yes, it's possible. Is it probable? No, it is not. So I would side more so with bears as to whether or not the markets are going to continue this trajectory higher into 2021. And when you take a look at your oscillators, you could see that RSI is in a downtrend, meaning we have a bearish divergence. The markets are sending us a signal vis-a-vis the RSI, where we are putting in higher highs and higher lows on price. Yet the RSI is putting in lower highs and lower lows on price. And when you take a look at the stochastics, they are rolling over, putting in lower highs and lower lows. So the stage is set for a sell-off here. And you may be saying, you know, Bob, what you're betting is, is that the Federal Reserve is not going to win here. They are printing money. They're going to keep interest rates down forever because they have the power. I'm going to show you a chart in a second that's going to wow you a bit, stick around. Now I'm recording this on Saturday, the 19th of December. The Federal Reserve met this past week, and they were very dovish, very, very dovish. And one might expect that when you take a look at the weekly chart of the 10-year yield, which is what we're looking at, we would think that, wow, you know, yields must have dropped last week because the Federal Reserve was so dovish. They're standing ready to have the back of the market. One problem. Yields rose by over 5.5% last week alone. We flashed a big reversal bar last week, despite the fact that the Federal Reserve said on a forward-looking basis they were going to be dovish. And despite the fact that they continue to print money, let's go to a one-year view, hand over fist, you would think that yields would be dropping. They are not. And that is what has been keeping the stock market higher, declining yields. What if the Federal Reserve no longer has control of yields? What if bondholders are looking at the United States and saying these people have no idea of what they're doing? They've gone mad. We want to get paid more for our debt rather than just simply getting paid less than 1% over a 10-year period. Think about it. And when you take a look at the lows of the year, back in August of this year, 2020, all the debt printing since that point in time and yields have just gone up and they have broken out. Not only have they broken out, they've created a W formation and now they're poised to break out higher. What does this mean and what does this have to do with gold? Well, if the debt market begins to implode, bonds drop, yields rise, you will enter a risk-off environment, meaning traders will sell stock, they will buy gold, they will buy silver, they will buy anything that if you drop it on your foot, it hurts. Now let's take a look at gold. Gold, this is a quarterly chart. Gold has had a beautiful year. We made a new all-time high this year. Yet nobody wants to talk about it. Granted, we didn't hold those gains, meaning we did not close out the year at new all-time highs. Perhaps we will by the end of the year. I doubt it though. It's improbable. But what we're setting up for here, after this pullback, we have rallied off the lows of the quarter and we are poised to break out into Q1 of 2021, which is a seasonally favorable period of time for gold and that continues into the spring. Now, when you take a look at two charts and you ask yourself the question of what has more upside here given the fundamentals of the strength of the U.S. dollar, a chart of which I'm going to talk about in a moment, and the risk of higher yields in the future in 2021, which has more risk and upside potential? Gold, as you see here, or the already extended and at resistance S&P 500. That's the question you need to ask yourself. Do I feel more comfortable from a risky war perspective with owning the S&P 500 or gold as my speculative trade for 2021? The chart I'm going to leave you off here with is the chart of the U.S. dollar. The U.S. dollar, this is a quarterly chart, is breaking down and breaking down dramatically. We hit lows just this past week, last seen back in April of 2018, multi-year lows, and we're only going lower. Did you know that of all the U.S. dollars in circulation right now, 21% of those dollars were printed in 2020? Think about how dilutive that is to the U.S. dollar. We continue to purposely devalue our currency, no different than what President Nixon did at the beginning of this commentary. And look at the chart here of the U.S. dollar, it's being reflected. And this can get a lot worse very, very quickly, and things in the United States can get real, real, real fast. And if you ask me, what do I want to own in that scenario, stocks, which are essentially certificates of paper or gold, gold, hand over fist? Take a look at the relationship of gold highlighted here, obviously in gold versus the U.S. dollar, as goes the U.S. dollar inversely goes the price of gold. So folks, in closing, one of our key trades for the coming year, 2021, is going to be gold, silver, and the miners of both. The metals, gold and silver are tools for preservation of buying power. Where is the miners? Those are wealth creators. So in short, if you want to preserve the value of your U.S. dollar, you buy the precious metal. If you want to speculate and gain wealth during this soon to be great period of time, then you want to buy the gold and silver miners because they tend to outperform the metal. Now, I mentioned earlier other areas that we like, and I'm not going to talk much about them today, but I just want to share with you other ideas that we have. And we've been talking about them for quite some time now, where we want to take advantage of going back to the third D, which is decoupling. That decoupling is bringing with it a supply chain shift. So the question needs to be asked, who benefits? Let's talk about it. This is the Van Act Vietnam Vectors ETF. And you could see that this is a quarterly chart that we are breaking out to highs not seen since April of 2019, a beautiful year for the Vietnamese fund. We plan on buying this fund. We are already long of emerging markets. We believe that emerging markets are the place to be along with gold and the miners moving into 2021 and beyond. Why? The declining US dollar acts as a tax cut for emerging markets. Add to that the coupling of the supply chain moving from China into other markets, Vietnam, the closest. And the other market that we like is the Wisdomtree India Earnings Fund. Now, the beautiful part about this is that India, their stock market is breaking out to multi-year highs as we begin 2021. Now, as the huge population of India begins to see a growing middle class because of that supply chain shift, anyone who knows anything about the average Indian citizen is this. They love gold jewelry, huge buyers of gold jewelry, not just bars for their central bank, gold jewelry from over a billion Indians. Think about it. So this is an untapped market that is now blowing up. We will be a part of it. And the rest of the emerging markets, not so much the US markets, but certainly gold mining stocks, silver mining stocks, we continue to accumulate those names, silver, gold. So I would encourage you to please join the contrarian trading community. We think outside the box, we're not giving you talking points of what you hear on CNBC. We think for ourselves, we have a great strategy that is playing out very, very well in 2020. And I believe that it will carry through to 2021 and a number of years beyond until the United States gets its fiscal house in order. Thanks for joining and I hope to speak to you soon. Be well.