Talking Points From This Episode- Recovery, Dollar, & Bonds- Hyperinflationary Scenarios- Bonds, Dollar, & Gold- Bitcoin Vs. Money
Time Stamp References:0:00?EUR< - Intro0:34?EUR< - Treasury Plans & Neg. Rates8:24?EUR< - Backwardation9:45?EUR< - Bonds Up Globally13:58?EUR< - Hyperinflationary Scenario17:05?EUR< - EU Banking Imploding18:54?EUR< - Gold Relative to Dollars20:45?EUR< - Gold and Yields23:22?EUR< - Silver in London27:04?EUR< - Gold/Silver is Money28:08?EUR< - Recent Market Activity29:35?EUR< - Leasing/Rehypothecation34:03?EUR< - Bitcoin37:46?EUR< - Currency and Growth39:27?EUR< - Using Fiat and Inflation44:32?EUR< - Wrap Up
Tom welcomes a new guest to the show, Alasdair Macleod. Alasdair is the Head of Research for Goldmoney and an advocate for sound money.
Alasdair explains how the Treasury plans to spend the 1.6 trillion in the general fund over the coming months and its effects. The Fed is forcing the large banks to implement negative interest rates on deposits. He outlines backwardation and the implications for overnight loans with negative interest rates.
Alasdair doesn't see much chance of a sudden economic recovery, and the markets are beginning to understand inflation is coming. In an inflationary environment, investors want higher rates of returns on their money. Rates are rising globally, and ironically, those in Europe are almost in positive territory.
He feels the EU banks remain vulnerable and the entire banking system there is in zombie mode. This state can't continue much longer.
Historically gold is extremely cheap compared to the dollar, which demonstrates how broken the markets have become. However, you wouldn't think gold would be acting dead at the bottom of the swimming pool in this environment.
Gold can and often does rise along with bond yields. During the 1970s, gold moved up in multiples along with rising rates.
Comex gold suppression is designed to keep regular investors uninterested in the shiny metal. Silvers has had something of a run in the market, and very little remains in London and Switzerland. They are likely holding some metals back, but overall deliveries from the Comex are tight. This is a wonderful opportunity to stack and keep in mind you can buy many things when no one else has physical gold and silver.
Alasdair believes that central banks have been leasing gold into the markets. A recent GLD prospectus detailed some reserves of the ETF being held at the Bank of England. The only way that could happen is if it was leased. Central banks can intervene to smooth things over, but that results in multiple owners. Central banks don't have or store silver. London silver is mostly stored with ETF's and industrial users only take it from the vault as needed.
Bitcoin is a fascinating development, and it's educated an entire generation or more on fiat currency risk. He questions if Bitcoin should be regarded as money or just as a store of value. Due to its deflationary nature, it can't easily support a debt-based monetary system.
Alasdair Macleod is head of research for GoldMoney. Alasdair has been a celebrated stockbroker and Member of the London Stock Exchange for over four decades. His experience encompasses equity and bond markets, fund management, corporate finance and investment strategy.