GOLDEN LINING - Looks like my next trade could be a long GOLD trade. So many gold bugs out there and so much talk over the metal and I haven't really played it that much over the years. But alas, with central bank policy where it is, I am less concerned with any upward momentum in the US Dollar and weighing influence on gold. I don't believe that correlation carries as much weight these days. Most currencies offer little to no yield at the moment, while others require you to pay to be holding. At the same time, you have a global equity market that is being artificially supported on this free money central bank policy that has nothing much left in the tank. To me, the writing's on the wall and there really is only one meaningful direction gold can go and that's substantially higher.
NOT JUST ME - Why do I want to be owning fiat currency that shows gloomy prospects at best in the current global macro backdrop? Why do I want to own stocks that are almost certainly due for collapse once investors lose confidence in central bank strategies. Furthermore, with this type of economic downturn, there is unfortunately and inevitably geopolitical risk that always works its way into the fold as well. And in this type of environment, gold is also an extremely attractive play. So all in all, this is a play that make sense to me and one that is also shared by greater minds. Former Fed Chair Alan Greenspan has been talking up gold over the past several months and also sees this market much higher over the coming years. Now whether or not this pans out on my dime remains to be seen. But at least for now, the case to own the metal is highly compelling at current levels and shows a lot of promise.