If you’re worried about inflation, buying any long-term asset that’s not fixed-income will be independent of a currency’s price. A bond is tied to a currency, plus it’s a bet on interest rates....
If you’re worried about inflation, buying any long-term asset that’s not fixed-income will be independent of a currency’s price. A bond is tied to a currency, plus it’s a bet on interest rates. (Maybe a good bet if you think they will go down?)
Real estate and stocks have their own risks, but at least they’re expected to make money, unlike an asset with no income stream.
Gold does have the benefit of being fungible, whereas real estate isn't so much. But this is generally good advice that you give. Although, what do you do if you're worried about the decline of...
Gold does have the benefit of being fungible, whereas real estate isn't so much. But this is generally good advice that you give.
Although, what do you do if you're worried about the decline of the dollar's dominance globally?
Relative to what? For example, the yen has very low inflation (sometimes deflation), and yet if you look at the exchange rate it's at a low compared to the dollar. Time to buy while it's on sale?...
Relative to what? For example, the yen has very low inflation (sometimes deflation), and yet if you look at the exchange rate it's at a low compared to the dollar.
Time to buy while it's on sale? I don't know enough about Japan to make this bet.
Well, first you'd need an alternative. The reason a lot of international money comes into the US is that it's deemed safe for investment. You can be reasonably confident (rogue states aside) that...
Although, what do you do if you're worried about the decline of the dollar's dominance globally?
Well, first you'd need an alternative. The reason a lot of international money comes into the US is that it's deemed safe for investment. You can be reasonably confident (rogue states aside) that your investment isn't going to be expropriated. I don't see China offering the same sort of environment in the next few decades.
If you need yield, buy the short-end of the fixed income market. But longer dated yields don't look great to me as they go to test 5%. For stocks, I see the expectation to make money as a bug, not...
If you need yield, buy the short-end of the fixed income market. But longer dated yields don't look great to me as they go to test 5%.
For stocks, I see the expectation to make money as a bug, not a feature. But some people are really good at stocks, I'm not. So for some people it works.
With gold and bitcoin I never have worry about about earnings expectations being missed. These are monetary inflation and liquidity-linked assets with visible flows (esp bitcoin), and I have a better sense of flow analysis and what direction monetary inflation and liquidity is going esp. long-term, than I do on if a company is going to beat their quarterly estimates.
Gold has been rising, but other hard assets are also climbing. Uranium, oil, Bitcoin. Silver and copper are just starting their rise. The author cites inflation and uncertainty as main reasons....
Gold has been rising, but other hard assets are also climbing. Uranium, oil, Bitcoin. Silver and copper are just starting their rise. The author cites inflation and uncertainty as main reasons. There will always be uncertainty. The world macroeconomic picture is less certain today than in 2011, the last big run in gold.
Inflation (measured by the 1990 or 1980 cpi on shadowstats) is far above the 2% 'target' rate. The US is adding a trillion dollars in debt every hundred days.
Even if there weren't two major regional wars in Europe and the mid East, and the de dollarizing of international trade, it's a surprise gold isn't moving higher and faster based on inflationary forces.
Agreed, especially on the your point of the global conflicts, gold is proving to be a neutral reserve asset for settling large trade imbalances between China (who want to buy oil in Yuan) and...
Agreed, especially on the your point of the global conflicts, gold is proving to be a neutral reserve asset for settling large trade imbalances between China (who want to buy oil in Yuan) and Russia (who had been sanctioned which is essentially USD confiscation.)
Paraphrasing Luke Gromen mentioned in the article, gold is becoming an oil currency.
Bitcoin is benefiting from the reflationary pressures and global liquidity increase. It speaks the language of gold but no central bank will yet admit to buying it up as a neutral monetary asset.
Silver is interesting because its too useful of a commodity for CBs to want to buy in their size. It would be like buying tons of corn. If corn goes too high then people get less food. Like the other hard assets you mentioned it will follow the trend, and probably to a more volatile degree (bitcoin and silver have similar market caps).
According to goldprice.org, gold has been on a rocket since 2009. Gold went up 300% in 15 years. However the S&P went up 500% over the same span of time and the DJIA about 400%. Am I missing...
According to goldprice.org, gold has been on a rocket since 2009. Gold went up 300% in 15 years.
However the S&P went up 500% over the same span of time and the DJIA about 400%.
Am I missing something here? Is this another form of doomerism? Granted I have difficulty disagreeing with this assessment.
Time window preference. S&P 500 is down in gold terms since 2000. S&P 500 is majorly down in BTC terms since inception. Any time window of any asset can be used to find blemishes. My view is: why...
Time window preference. S&P 500 is down in gold terms since 2000. S&P 500 is majorly down in BTC terms since inception.
Any time window of any asset can be used to find blemishes.
My view is: why wouldn't I want a scarce or fixed supply asset in an inflationary environment, that is being quoted in a currency that has infinite supply, where that currency is steadily collapsing in purchasing power. Especially if that asset is not subject to beating market expectations, managerial performance, dealing with antitrust lawsuits, carrying the weight of the S&P 500 on its shoulders since we know most of that market concentration is on six companies at this point.
If you’re worried about inflation, buying any long-term asset that’s not fixed-income will be independent of a currency’s price. A bond is tied to a currency, plus it’s a bet on interest rates. (Maybe a good bet if you think they will go down?)
Real estate and stocks have their own risks, but at least they’re expected to make money, unlike an asset with no income stream.
Gold does have the benefit of being fungible, whereas real estate isn't so much. But this is generally good advice that you give.
Although, what do you do if you're worried about the decline of the dollar's dominance globally?
Relative to what? For example, the yen has very low inflation (sometimes deflation), and yet if you look at the exchange rate it's at a low compared to the dollar.
Time to buy while it's on sale? I don't know enough about Japan to make this bet.
Well, first you'd need an alternative. The reason a lot of international money comes into the US is that it's deemed safe for investment. You can be reasonably confident (rogue states aside) that your investment isn't going to be expropriated. I don't see China offering the same sort of environment in the next few decades.
If you need yield, buy the short-end of the fixed income market. But longer dated yields don't look great to me as they go to test 5%.
For stocks, I see the expectation to make money as a bug, not a feature. But some people are really good at stocks, I'm not. So for some people it works.
With gold and bitcoin I never have worry about about earnings expectations being missed. These are monetary inflation and liquidity-linked assets with visible flows (esp bitcoin), and I have a better sense of flow analysis and what direction monetary inflation and liquidity is going esp. long-term, than I do on if a company is going to beat their quarterly estimates.
Gold has been rising, but other hard assets are also climbing. Uranium, oil, Bitcoin. Silver and copper are just starting their rise. The author cites inflation and uncertainty as main reasons. There will always be uncertainty. The world macroeconomic picture is less certain today than in 2011, the last big run in gold.
Inflation (measured by the 1990 or 1980 cpi on shadowstats) is far above the 2% 'target' rate. The US is adding a trillion dollars in debt every hundred days.
Even if there weren't two major regional wars in Europe and the mid East, and the de dollarizing of international trade, it's a surprise gold isn't moving higher and faster based on inflationary forces.
Agreed, especially on the your point of the global conflicts, gold is proving to be a neutral reserve asset for settling large trade imbalances between China (who want to buy oil in Yuan) and Russia (who had been sanctioned which is essentially USD confiscation.)
Paraphrasing Luke Gromen mentioned in the article, gold is becoming an oil currency.
Bitcoin is benefiting from the reflationary pressures and global liquidity increase. It speaks the language of gold but no central bank will yet admit to buying it up as a neutral monetary asset.
Silver is interesting because its too useful of a commodity for CBs to want to buy in their size. It would be like buying tons of corn. If corn goes too high then people get less food. Like the other hard assets you mentioned it will follow the trend, and probably to a more volatile degree (bitcoin and silver have similar market caps).
According to goldprice.org, gold has been on a rocket since 2009. Gold went up 300% in 15 years.
However the S&P went up 500% over the same span of time and the DJIA about 400%.
Am I missing something here? Is this another form of doomerism? Granted I have difficulty disagreeing with this assessment.
I feel like the "message" is "buy gold" and not really anything more profound.
Time window preference. S&P 500 is down in gold terms since 2000. S&P 500 is majorly down in BTC terms since inception.
Any time window of any asset can be used to find blemishes.
My view is: why wouldn't I want a scarce or fixed supply asset in an inflationary environment, that is being quoted in a currency that has infinite supply, where that currency is steadily collapsing in purchasing power. Especially if that asset is not subject to beating market expectations, managerial performance, dealing with antitrust lawsuits, carrying the weight of the S&P 500 on its shoulders since we know most of that market concentration is on six companies at this point.
Mirror, for those hit by the paywall:
https://archive.is/0hXyU