Most of my followers know my take on Gold and Bitcoin when it comes to the macro environment we are in. We are deep into the confidence crisis. A confidence crisis in governments, central banks and fiat currencies. I have said you NEED to be in Gold and Silver, and I think holding cryptos is prudent too.
In terms of the confidence crisis:
Governments are broke. The reason why Gold went up and broke out is because more stimulus is coming. This GUARANTEES negative interest rates in the future as a way for governments to service all this new debt. Said it before, but holding bonds for safety is ending. The asset allocation model is going to need a redo. Bonds are being held for capital appreciation betting on negative interest rates, rather than holding for yield...because you cannot make a REAL return.
Gold has no yield. BUT if rates are negative, would you rather hold a hard asset or government paper? The fact is that Gold moves more than 3% a month, so a fund could potentially make money holding Gold as it moves quicker than bonds anyways. Most funds only have a 1% or less allocation in Gold. If they move it up to 5%, it will easily take Gold past 2k and 3k. You can take a look at my earlier work on how large funds will play Gold.
Elections are coming up in November, and regardless of whichever party wins, the other side will not accept the results. We heard Russian hacks, what is next? There will be more violence on the streets after the results. People will die. America is divided.
In terms of the central banks and fiat currency, it needs not much explanation. Central banks are running out of options. They can only print money and cut rates deeper into the negative. They are all killing their currencies (inflation). With the pandemic, money velocity is low. Once that returns watch out. Said this before but free markets are dead. Central banks are becoming the most powerful institutions in human history. They will be buying everything up.
This move away from fiat is the case for cryptos. I have a lot of reservations about crypto because I do believe we are going into digital currency next. It is the way the Keynesians keep this system going. Money supply is not going to matter, and all money will be tracked and taxed which will be required to pay off all this debt after covid. It will be the middle class who pays for it.
The other reservation about crypto is you will not see large funds jump in. Individual millionaires and billionaires sure. But large funds nope. The issue is that crypto exchanges are not regulated. This means if Bitcoin hits 100k and ppl try to cash out, the exchanges will likely not have the money to pay you out. They legally do not need to since they are not regulated. We have already seen this issue with ppl losing money on exhanges but cannot do anything about it due to the lack of depositer insurance/protection.
I am bigger on Gold and Silver, but anything away from fiat is what you want to be in. We will see if Bitcoin stays above this breakout zone. As long as it does, we are going to the target level and likely higher.
In terms of the confidence crisis:
Governments are broke. The reason why Gold went up and broke out is because more stimulus is coming. This GUARANTEES negative interest rates in the future as a way for governments to service all this new debt. Said it before, but holding bonds for safety is ending. The asset allocation model is going to need a redo. Bonds are being held for capital appreciation betting on negative interest rates, rather than holding for yield...because you cannot make a REAL return.
Gold has no yield. BUT if rates are negative, would you rather hold a hard asset or government paper? The fact is that Gold moves more than 3% a month, so a fund could potentially make money holding Gold as it moves quicker than bonds anyways. Most funds only have a 1% or less allocation in Gold. If they move it up to 5%, it will easily take Gold past 2k and 3k. You can take a look at my earlier work on how large funds will play Gold.
Elections are coming up in November, and regardless of whichever party wins, the other side will not accept the results. We heard Russian hacks, what is next? There will be more violence on the streets after the results. People will die. America is divided.
In terms of the central banks and fiat currency, it needs not much explanation. Central banks are running out of options. They can only print money and cut rates deeper into the negative. They are all killing their currencies (inflation). With the pandemic, money velocity is low. Once that returns watch out. Said this before but free markets are dead. Central banks are becoming the most powerful institutions in human history. They will be buying everything up.
This move away from fiat is the case for cryptos. I have a lot of reservations about crypto because I do believe we are going into digital currency next. It is the way the Keynesians keep this system going. Money supply is not going to matter, and all money will be tracked and taxed which will be required to pay off all this debt after covid. It will be the middle class who pays for it.
The other reservation about crypto is you will not see large funds jump in. Individual millionaires and billionaires sure. But large funds nope. The issue is that crypto exchanges are not regulated. This means if Bitcoin hits 100k and ppl try to cash out, the exchanges will likely not have the money to pay you out. They legally do not need to since they are not regulated. We have already seen this issue with ppl losing money on exhanges but cannot do anything about it due to the lack of depositer insurance/protection.
I am bigger on Gold and Silver, but anything away from fiat is what you want to be in. We will see if Bitcoin stays above this breakout zone. As long as it does, we are going to the target level and likely higher.