I like gold but I have cut it back a lot in the last 2 weeks. I just cannot be in a crowd of this size - I get frightened. The punchline to me is, right now, you must hedge your gold position. Gold was the hedge, but now it needs to be hedged. And I agree short S&P is the right way to do it. Not quite my mandate, but that is also what I would do.
Yep, this is very easily fixable by lowering rates/devaluing the USD. Which is also a logical thing to do if you want to onshore, rather than running around charging other people with tariffs. Looks like we are getting there.
FED is stopping QT for now and means that net net FED is creating more liquidity into markets propelling risk assets, so good for gold/silver/miners and in general all risk assets, until the music stops, let's see what will stop it, my guess long term bond yields once moving beyond 5% and accelerating quickly...
Whit JGB yields becoming increasingingly more attractive vs US assets (both equities and treasuries), why the market is so reluctant in positioning for a stronger yen? (Or, in other words, any idea as to why this repatriation is not happening?)
good question - I think it mainly to do with the attitude to fiscal spend, which has changed considerably. Japan can no longer spend 1% of GDP on defence, and also needs to invest internally, so this also raise inflation expectations. In the deflationary 1990s and 2000s, long bonds never really sold off as policy is deflationary. Now we are in a different world, and Yen is not so attractive.
I like gold but I have cut it back a lot in the last 2 weeks. I just cannot be in a crowd of this size - I get frightened. The punchline to me is, right now, you must hedge your gold position. Gold was the hedge, but now it needs to be hedged. And I agree short S&P is the right way to do it. Not quite my mandate, but that is also what I would do.
Yep, this is very easily fixable by lowering rates/devaluing the USD. Which is also a logical thing to do if you want to onshore, rather than running around charging other people with tariffs. Looks like we are getting there.
FED is stopping QT for now and means that net net FED is creating more liquidity into markets propelling risk assets, so good for gold/silver/miners and in general all risk assets, until the music stops, let's see what will stop it, my guess long term bond yields once moving beyond 5% and accelerating quickly...
Whit JGB yields becoming increasingingly more attractive vs US assets (both equities and treasuries), why the market is so reluctant in positioning for a stronger yen? (Or, in other words, any idea as to why this repatriation is not happening?)
good question - I think it mainly to do with the attitude to fiscal spend, which has changed considerably. Japan can no longer spend 1% of GDP on defence, and also needs to invest internally, so this also raise inflation expectations. In the deflationary 1990s and 2000s, long bonds never really sold off as policy is deflationary. Now we are in a different world, and Yen is not so attractive.
Perhaps Chair Powell is reading your mind as he appears ready to restart QE
the problem is that if the rest of the world is doing ok, then QE will create inflation this time...
totally agree. higher inflation is already baked in the cake I fear. at least, higher than the 2% that was alleged prior to Covid.