1911 Gold Corporation (TSXV: AUMB; OTCQX: AUMBF)
1911 Gold is Manitoba’s Gold Standard - Ready, Permitted and High-Grade 1911 Gold is an Emerging Gold Producer, with Significant Cash Flow Generation and District-Scale Growth Potential
After experiencing early-year frenzy and overbought conditions, the gold market has undergone a significant pullback — with prices falling from $5,500 per ounce to a recent low of $4,200. However, veteran investment strategist Eric Fry clearly states: The gold bull market is not over; it is merely “napping.”
Four Types of ‘Disorder’ Support Gold’s Logic
Fry cites the framework of renowned financial writer James Grant, proposing that gold is essentially a bet on “monetary disorder” — as well as fiscal disorder, geopolitical disorder, and presidential disorder.
Over the past year, these four types of disorder have not dissipated; if anything, they have intensified. Among them, fiscal disorder is the most overlooked by mainstream financial media, yet it may have the most profound impact on the gold market.
Fiscal disorder is an elegant term for the runaway expansion of government deficits and debt. When a nation’s finances spiral out of control and its creditors begin to back away, that country loses a significant portion of its freedom, self-determination, and power. A debt crisis quickly becomes a currency crisis, and a currency crisis can destroy an entire economic foundation.
U.S. Fiscal Condition Is Flashing Warning Signals
Fry believes that while the U.S. is not yet on the threshold of a currency crisis, it is gradually moving toward the kind of fiscal disorder that could exert sustained downward pressure on the dollar’s value. Several signals warrant attention: interest payments on the national debt have exceeded the defense budget; foreign creditors are quietly reducing their exposure to U.S. Treasuries; the U.S. debt-to-GDP ratio is now comparable to those of nations that have historically struggled to maintain the confidence of global bond markets
These warning signs are flashing. The U.S. government’s fiscal predicament is not yet a crisis, but it has become a “slow-motion reckoning” — increasingly difficult to ignore and more expensive to defer.
Why Now Is the Time to Increase Gold Allocations?
Gold does not predict the timing of a reckoning, but it has an excellent historical record: rewarding those who recognize the signs early.
Fry points out that since he presented his bullish argument for gold and gold stocks in his investment report a year ago, that bet has gained 42% — more than double the returns of the S&P 500 over the same period. The two-month pullback raises an obvious question: Is it time to close out the bet on gold, or add to it? The answer is obvious. The reason is simple: The four types of disorder identified by Grant have not dissipated. If anything, they have become even more disorderly over the past year.
Conclusion
For investors who have not yet allocated to gold, the current pullback offers an attractive entry window. The foundation of the gold bull market — deep-seated uncertainties in global fiscal, monetary, geopolitical, and political spheres — remains intact. The pullback in gold prices from $5,500 to $4,200 is not a trend reversal, but rather a “healthy digestion” that is building a stronger foundation for the next leg higher.
