In this interview, Michael Howell from Cross Border Capital suggests that the Fed will be forced to step in to fund US federal government deficits.
Deficits will rise for two reasons:
- An ageing population means greater spending on Medicare, Medicaid and social security.
- Defense spending rising to 5.0% of GDP.
Japan and China are no longer buying Treasuries and the private sector doesn’t have the capacity. The Fed will have to step in.
In Howell’s words: “THERE IS NO OTHER WAY OUT”.
Conclusion
Gold is a great hedge against expected monetary inflation.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.
Gold increases are subject to the currency you deal in, so rising gold and a falling currency does not necessarily result in increases in investment. There is also the spread cost in buying and selling to factor into profits and this is where holding the physical can eat into profits as well. What do you consider the best way to profit from gold?
Hi Ian, I am not licensed to give financial advice on this forum.
I agree with Michael Howell that Gold is a monetary hedge: you don’t profit from holding Gold, it just looks that way because your Dollars are losing value. A general observation is that miners have struggled with rising costs and disappointed as an inflation hedge.