stay long gold/silver/miners as bond vigilantes will force govs to either do austerity and get their house in order (ie lower budget def) or accept higher interest rates and effectively let CBs buy their own bills/treasuries to finance outstanding liabilities ie revert to massive QE again and hence devalue own currency which gold/silver/miners will price in in coming months/quarters years as there is no escape from overboarding debt as non of politicians dare to cut on spending, its a political request now not a financial to devalue as time has come to reset but no-one dares to do...
True - but almost all Japanese debt is in Yen. Almost all other sovereign debt crisis comes from foreign currency debt. The other option is a currency crisis - which large foreign reserves are meant to stop....
Correlation and causation always difficult to tease out here... For me, globalisation was deflationary - so long duration trades worked well. Deglobisation is inflationary, so short duration trades work well. That BOJ made money with a long duration trade does not mean that the BOJ strategy made JGBs a buy.
stay long gold/silver/miners as bond vigilantes will force govs to either do austerity and get their house in order (ie lower budget def) or accept higher interest rates and effectively let CBs buy their own bills/treasuries to finance outstanding liabilities ie revert to massive QE again and hence devalue own currency which gold/silver/miners will price in in coming months/quarters years as there is no escape from overboarding debt as non of politicians dare to cut on spending, its a political request now not a financial to devalue as time has come to reset but no-one dares to do...
Any thoughts on potential crowding in long gold? Or to put it better what are your go to red flag indicators for long gold to get too crowded.
Share count dropped quite quickly in GLD. If anything IBIT has the most crowding issure
Sure Japan has large reserves relative to other countries, but with 9t (USD equiv) of gov debt, having 1t of reserves is not that sizeable.
True - but almost all Japanese debt is in Yen. Almost all other sovereign debt crisis comes from foreign currency debt. The other option is a currency crisis - which large foreign reserves are meant to stop....
Have you seen this one: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4620159
What about Japan?
Correlation and causation always difficult to tease out here... For me, globalisation was deflationary - so long duration trades worked well. Deglobisation is inflationary, so short duration trades work well. That BOJ made money with a long duration trade does not mean that the BOJ strategy made JGBs a buy.