Expect 'collapse' and 'unrest'; Hedge using gold, guns, livestock, and land - Tom Luongo
We are entering a time of “institutional collapse” and “institutional unrest,” said Tom Luongo, Author and Publisher of the Gold, Goats ‘n Guns newsletter, who advocates investors look into guns, livestock, land, and gold as assets for their portfolio.
“You’re buying guns as insurance against your tangible assets, against someone stealing them from you,” he said. “Well, inflation is also theft. It’s theft of purchasing power over time, so that’s why you’re supposed to buy gold.”
Luongo emphasized that although investors had experienced forty years of bull markets in bonds and equities, “nothing lasts forever.”
“The current [monetary and financial] architecture is unsustainable, but it’s also not going to go away completely,” he said. “You’re going to have to re-learn everything you learned in your life.”
Luongo spoke with David Lin, Anchor and Producer at Kitco News.
Investing in guns and ammo
According to the U.S. Producer Price Index for arms manufacturers, gun prices have risen by 6 percent since 2014, and imports of guns into countries like Canada have been increasing since then.
Luongo said that the reasons behind these trends are a fear of social disorder, and concern about a “hostile regulatory environment.”
“We’re entering a phase of sincere institutional collapse and institutional unrest, and when those things happen, then invariably people’s anxiety rises and they think in terms of personal protection,” he explained. “Of course, it never hurts that we have a hostile regulatory environment. I know it has been an issue in Canada, the potential for an outright ban on guns. The Democrats [in the U.S.] make it an issue every couple of election cycles.”
He said that economic problems, like inflation and a rise in taxation, would lead to rising civil unrest, increasing demand for guns.
“As far as guns as a long term investment go… guns are going to be driven underground, and when you drive something underground, you create a black market for it, and value is going to go up,” he said. “I’ve got guns that I bought twenty years ago for $100 or $200, which I know I could sell for unbelievable amounts of money today, because of the changes in import laws or regulations.”
Luongo, who owns goats, said that even though livestock prices have been going up, farmers are not getting properly compensated since feed prices have also risen.
“[Feed is an] input cost to animals, and it’s the biggest input cost in getting your animal to market,” he said. “Beef prices are going to get much higher than where they currently are… The price of goat feed is $22 per bag. It used to be $8 when I bought my first herd of goats in 2010. Cheap hay is $8 per bushel, and it used to be $3. Everything is going up.”
He added that there are regulatory risks, as politicians clamor to restrict meat farming due to concerns over climate change. He highlighted the plight of Dutch farmers, who are protesting their government’s proposed fertilizer reductions, which could reduce crop yields.
“I think [the ESG pressure] is designed to have more control over the food supply,” he said. “It’s a political agenda, and that’s all it is… [The government] believes in this stupid global warming claim that cow farts create global warming.”
To allay ESG concerns in farming, scientists have proposed solutions like insect protein and synthetic meat. Luongo rejects both innovations.
“Synthetic meat is an abomination, we’re not eating bugs, and we don’t need to do any of this,” he said. “We’ve been farming cattle for thousands of years. We know how to do it, and we’ve been doing it very well.”
To find out Luongo’s thoughts on gold and the Fed pivot, watch the video above.
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