Veteran natural resource investor Rick Rule has warned that the US dollar could lose around 75% of its purchasing power over the next decade. Speaking with GoldCore, he argued that if that scenario unfolds, a five-digit gold price would be a reasonable outcome. Rule's case for owning gold, however, is not primarily about price targets but about preserving wealth in an uncertain environment.
Why Rule sees a weaker dollar ahead
Rule's concern centres on government debt and long-term interest rates. He believes the rising burden of sovereign borrowing will erode the real value of fiat currencies over time. The dollar, he suggests, is particularly vulnerable because of the scale of US fiscal obligations. A 75% loss of purchasing power would mean that a dollar today would buy only a quarter of what it buys now in a decade's time.
If that happens, Rule says a five-digit gold price — that is, $10,000 or more per troy ounce — becomes plausible. Gold is priced in dollars, so a weaker dollar tends to push the metal's nominal value higher, all else being equal.
Gold as insurance, not a speculation
Rule does not own physical gold because he expects it to rise. He considers it wealth and insurance. He holds it because he is concerned about what it would mean if the price went significantly higher — a sign that the dollar's purchasing power was collapsing. In his view, gold's role is to protect against tail risks that mainstream portfolios ignore.
Despite this, precious metals remain a tiny part of US savings and investment assets. Rule notes that they account for less than half of 1% of the total, compared with a 45-year median of 2%. That gap, he argues, may close as more investors wake up to the reality of declining purchasing power.
Gold stocks and a contrarian silver move
The conversation also touched on gold mining equities and silver. Rule described a contrarian approach to investing in the sector. Notably, he sold 80% of his physical silver earlier this year, a move that reflects his willingness to take profits when his views shift. He did not disclose the exact timing or price, but the sale suggests he sees better relative value elsewhere in the precious metals space.
Key takeaways
- Rick Rule believes the US dollar could lose 75% of its purchasing power over the next decade.
- He says a five-digit gold price would be reasonable if that scenario plays out.
- Rule views physical gold as wealth insurance, not a speculation on higher prices.
- Precious metals account for less than 0.5% of US savings assets, well below the 45-year median of 2%.
Common questions
What does a 75% loss of purchasing power mean for the dollar?
It means a dollar would buy only a quarter of what it buys today, assuming the loss occurs over ten years. This would be a severe erosion of real value, driven by government debt and monetary policy.
Why does Rick Rule own physical gold?
He owns it as insurance and wealth preservation, not because he expects the price to rise. He is concerned about what a significantly higher gold price would imply for the broader economy.
How much of US savings are in precious metals?
According to Rule, precious metals currently make up less than half of 1% of US savings and investment assets, compared with a 45-year median of 2%.
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Rule's warning is not a prediction but a scenario he considers plausible. Whether or not it materialises, his argument that gold serves as a hedge against extreme outcomes remains a central theme for long-term investors.