Today’s Letter Is Brought To You By The Millerman School, studying Plato’s Republic ! If you want to better understand the human condition and current events, and establish a solid foundation for your study of philosophy, there’s no better place to start than Plato’s Republic . And now, you can study this foundational text of Western thought in a structured, 10-week seminar led by Dr. Michael Millerman. During the seminar you’ll study Plato’s Republic from cover to cover, with: * Individual 1-1 tutoring sessions with Dr. Millerman * Live group discussions, completely off-the-record * Guidance and commentary on the text * Weekly writing challenges to help you clarify your thinking * Weekly personal feedback from Dr. Millerman, and more! There are only 30 seats available, and applications will be processed in the order received. Studying Plato’s Republic is incredibly worthwhile – and many students would say life-changing – whether you’ve read it 10 times already or are reading it for the very first time. So if you’re ready to study this foundational text, apply now. To investors, There is a gold rush underway. No, seriously. Gold has been on an absolute tear recently and many investors are wondering what has been going on. Brookings Institute’s Robin Brooks writes “The Fed’s latest dovish pivot - telegraphed on August 22 by Chair Powell at Jackson Hole - unleashed something and I don’t think anyone really understands what that is. Gold is up a stunning 15% since that day, a rally that’s so big that it stands out on this 25 year chart.” Now remember, gold is a non-productive asset. It is supposed to be a stable store of value with very little volatility on a day-to-day basis. This is why a 15% move in about a month has put all eyes on the precious metal. One of the main reasons for this move is increasing investor demand. Adam Kobeissi explains “ Investors are piling into gold funds like never before. The largest gold ETF, $GLD, has attracted +$2.3 billion in net inflows so far in September. This marks the 7th monthly net inflow over the last 8 months. Year-to-date, $GLD has pulled in +$13.4 billion of capital, the most since the 2020 pandemic. As a result, gold is on track for its 7th quarterly gain over the last 8 quarters, its best streak since 2020.” These large inflows are noteworthy, but they don’t explain why so much capital is flocking to an asset that has been around for thousands of years. Robin Brooks attempts to explains this phenomenon when he writes gold “keeps rising even as the Dollar is stable against the rest of the G10. This means gold is a refuge from fiat currencies generally, not just the Dollar, as markets hunt for safe havens amid high debt and troubled fiscal outlooks. It looks like a broad debasement of fiat currencies is underway.” This broad debasement of fiat currencies should not be a surprise though. Global Markets Investor points out “currency debasement is not a bug — it’s a feature of the fiat system. Since Bretton Woods collapsed in 1971, not one of 152 countries has kept average inflation below 2%. Even Switzerland averaged 2.2%. Fiat money is in an eternal bear market.” Although it is impossible to prove, I believe the rise of bitcoin has greatly contributed to the marketing of gold. Bitcoiners have done an excellent job of calling attention to the problem with central bank activities. As Satoshi Nakamoto once said in a 2009 blog post, ‘The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.” That warning could come from a bitcoiner or it could come from a gold bug. That is the beauty of sound money assets. The holders of either the analog or digital version are on the same team. They are connected in their fight against currency debasement and inflation. But we can’t exclusively point to fiat debasement or central bank buying as the cause for gold’s recent rise. We know inflation fears, increasing geopolitical tensions, and expectations of more rate cuts from the Fed are contributing factors as well. Add in the recent media coverage of the gold rally and you have the perfect storm for gold to surge higher and higher. Now the challenge for investors is deciding whether they should buy gold or abstain because they missed the rally. I don’t have an answer for you. But I am reminded of the recent analysis from Deutsche Bank’s Jim Reid: “Ha d you bought Gold at its peak in 1980, you will only just have outperformed inflation today, 45 years later. By contrast, if you bought the S&P 500 on that day, it would have provided you with a stunning 4,250% real return. However, had you bought gold in 2000, you would have comfortably outperformed the S&P 500 since.” Welcome to the challenge of investing. You can pick the right asset for the right reasons, yet still end up with less than desirable results. No one promised
