Last year he stated that we were at the very beginning of a bull market in gold, however he says that was stopped by Donald Trump. Gold and commodities are dirt cheap when compared to stocks. Equities, bonds, and real estate are at or near their all time highs. He thinks the dollar is close to rolling over.
He calls the market the “everything bubble”, as just in the first quarter of 2017 the biggest central banks printed one trillion dollars, this is “advanced monetary surrealism”. The complacency that we are seeing in markets will likely lead to a crisis that will make 2008 look like a kindergarten party.
He talks about how recessions are normal and healthy in markets, but this is something that governments and central banks now wish to avoid. Tax receipts are falling off a cliff, loan growth is sluggish, industry is slow, and interest rates are rising. They have lost credibility over the last few years, and are trying to regain it, however he thinks they are tightening into weakness. At some point there will be talk of Fed rate reductions and discussion of another round of QE, this is when gold will make the next leg up.
In the near term there could be some further downside, he points out that gold is up when compared to most currencies of the world.
Ronald discusses mining equities and makes some comparisons, we are at a very attractive price level. Gold has experienced the longest bear market since 1942 in terms of both length and performance.
The SPDR Gold Trust ETF (NYSE:GLD) closed at $119.43 on Friday, up $0.51 (+0.43%). Year-to-date, GLD has gained 8.96%, versus a 8.77% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Palisade Research.