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Lacalle: Is Now The Time To Buy Gold?
Lacalle: Is Now The Time To Buy Gold?
In this interview Daniel Lacalle explains why the fundamentals for gold are stronger each day, and why silver and palladium should not be ignored in the current crisis.
Central banks keep buying more gold and will need even more as massive liquidity measures drive their balance sheets higher.
Supply challenges remain with some mines being shut down and new supply coming well below demand (as evidenced by the decoupling – once again – between spot and futs)…
Massive monetary imbalances globally will drive demand from investors looking for a hedge to currency debasement (and that systemic risk is soaring, with sovereign credit markets starting to leak information)…
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Finally, we give the last word to Raoul Pal and his most recent thoughts (excerpted) on “A Dollar Standard Crisis” (referring to his institutional market research at Global Macro Investor)…
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Don’t forget – the $13tn short dollar positions (foreign dollar debt held mainly by foreign corporation and investment vehicles) is the largest position ever taken in the history of global financial markets.
It can only mean a massive, uncontrolled dollar rally.
QE will not fix this. Swap lines will not fix this. A debt jubilee would fix this or multiple trillions of dollars in write-downs and defaults.
It is the dollar strength that brings to world to its nadir (just like the 1930s). It is the dollar system that is the really big problem.
The dollar has eaten all of its competitors and now it is going to eat itself.
This eventually breaks the dollar after a super-spike as global central banks are forced to find alternatives.
Remember, nothing lasts forever…
“The Whole World’s F**ked!” – Raoul Pal Pulls No Punches In Latest Interview
“The Whole World’s F**ked!” – Raoul Pal Pulls No Punches In Latest Interview
“The whole world’s f**ked.”
That is how Raoul Pal, the former hedge-fund manager who founded Real Vision, reacted when he first heard of the uncontrolled and rapid contagion of COVID-19 across the globe. Speaking from his home in the Cayman Islands on the latest “Lindzanity” podcast, the ex-Goldman, ex-GLG Partners trader said:
“The moment the spread hit Iran… and then Italy… that all happened over the span of three or four days… I was like: ‘time to panic before everybody else’…”
“It’s human behavior function. If the Chinese closed every single border and every city, everybody’s going to do it.“
“I said: ‘Listen, this is the biggest economic event of all of our lifetimes – and it’s coming’” he added. “And that was, in retrospect, the greatest call I’ve ever had.”
And now, with stock markets down 20-40% (depending on geography), bond yields collapsed, credit spreads still blown out, oil almost in the teens, and gold topping $1700, Pal continues to think (even after Monday’s manic short-squeeze meltup), that COVID-19 will cause “the largest insolvency event in all history.” And, as Business Insider notes, given his track record as of late, that’s not reassuring.
“I think the balance of probabilities are that this is a much longer event – in terms of economic impacts – than anybody is pricing in,” he said.
“I think it’s a huge societal change that’s coming from all of this.”
To Pal, it is the duration of the fallout from COVID-19 lockdowns that is the key factor here, and one he believes investors are not paying enough attention to (let alone pricing in). In his mind, those who are a projecting sharp V-shaped recovery in the third and forth quarter are incorrect in their assumptions.
…click on the above link to read the rest of the article…
