Are We Heading Towards A Second Wave Of Inflation?
It's no secret Gold is a safe haven against inflation during an economic storm, the question is what signs can we look for to know a storm is brewing?
Michael Burry has recently sold out of some of his largest tech holdings and moved more than 7% of his US porfolio into the Sprott Physical gold trust, a sign that he believes there is higher US inflation to come.
Warren Buffet has been selling down some off his largest holdings, and increasing his cash holdings, based on his view of whats available in the equity markets, what's going on globally, and his belief that the Fed is likely to increase taxes to reduce its fiscal deficit.
Howard Marks (Co-chairman of Oaktree Capital Management) also warns against a potential stock market bubble, driven by over-zealous bids on the influence of A.I in the Tech industry, making comparisons to the dotcom bubble, an interesting one to watch.
The US banking system faces significant unrealized losses, amounting to over $517 billion, largely due to residential real estate exposure, as reported by the FDIC. It also reported the number of US banks tetering on the brink of insolvency has risen again last quarter. Despite no immediate systemic threat, inflation, market volatility, and geopolitical issues pose ongoing challenges for the industry.
Meanwhile the US Personal Consumption Expenditures (PCE) price index report released on Friday bolstered confidence in US rate cuts later in the year, however the manufactoring Index has dropped which signifies a fall in economic growth. There are thoughts that the Fed could cut rates to boost the economy despite continued inflation, leading them into an error of stagflation?
India has just repatriated over 100 tonnes of it's gold stored with the bank of England, although a logistical challenge moving $8.3 billion worth of gold, the Indian Government will now be holding the majority of it's gold in its own vaults. Indias holding represents nearly 9% of its total foreign currency reserves.
For a good indepth read on the state of the precious metals market we recomend the 'In Gold We Trust Report.' In summary the 2024 report highlights significant changes in the gold market, necessitating a new strategic approach. The report examines the unprecedented gold price performance amid a complex global economic landscape where traditional correlations, such as those between gold prices and real interest rates, no longer hold. This shift, driven by increased central bank gold purchases and geopolitical tensions, underscores gold's unique position in a multipolar world economy.
Additionally, the report explores the impact of de-dollarisation, the growing role of China in the global gold market, and the diminishing influence of Western financial investors in determining gold prices. These factors highlight the need for investors to adopt the new gold playbook to navigate the current market complexities and optimise their investment strategies. For a more detailed analysis, the full report is available for download with the link below.
Check out the following links and let us know your thoughts!
NEWS & VIDEOS:
In Gold We trust Report 2024
$517,000,000,000 in Unrealized Losses Hit US Banking System, FDIC Says 63 Lenders on Brink of Insolvency
India repatriates over 100 tonnes of gold from BoE to RBI vaults, amount could double in coming months
Warren Buffett explains why Berkshire reduced its big Apple stake
Is the Stock Market One Giant Bubble? (Howard Marks Explains)
Gold Futures Regain Momentum as Economic Concerns Intensify
JP Morgan Chase annual shareholder letter