Insider Talks – August 2018

Published on
August 7th, 2018
Duration
30 minutes

Insider Talks – August 2018

Featuring Raoul Pal, Julian Brigden

Published on: August 7th, 2018 • Duration: 30 minutes

Raoul and Julian don't take any breaks during the dog days of summer and focus on what they do best - a run around the world of global macro, highlighting the main risks they see and the potential opportunities to take advantage of. Filmed on 1 Aug.

Comments

  • MP
    Mark P.
    9 August 2018 @ 04:46
    Love the dollar hedged gold ETF (GDXW) mentioned by Julian in concept. Given the persuasive strong dollar argument put forth by MI and others ( Jeffery Snyder, etc) combined with a personal desire to continue to hold gold ( despite the pain of the last many years), it seems a wonderful hedged position available to “retail” like me. My concern and question to Julian or Raoul (or others here) is how concerned should a holder of GDXW be with it’s minuscule liquidity / daily volume as we may be approaching another liquidity crisis. Low liquidity ETFs have been highlighted as very risky products by MI as well as others for years. Great concept ETF which I have already bought into, but worry about flash crash or fund liquidation in a risk off liquidity crisis. I understand safely vaulted physical avoids this risk. Hate to hold this ETF .( in my 401K ) and lose what I would otherwise gain in physical hedge. Any and all cogent thoughts much appreciated. Love RV and MI. Keep up the awesome work! Mark
    • WM
      Will M.
      10 August 2018 @ 16:26
      Yes Mark, I too am very interested in the product but your point on liquidity of the ETF is a bit worrying. Would be interested in a comment from the guys on this.
    • MP
      Mark P.
      11 August 2018 @ 15:19
      Price action since the piece released (and I entered trade) has been most satisfying. While gold has been flat GLDX has risen nicely with the dollar. Very short sample size, but so far so good....
  • JS
    John S.
    9 August 2018 @ 20:38
    Thanks Guys really appreciate your views. I have a good understanding of what could play out for the next 12-18 months thanks to you guys. My question is around beyond this time (where should we look to invest over the next 18 months for the gains over the next 5-10 years? What market segments/geographic areas etc... From listening and reading RV, TT, and Macro Insiders the general areas I have so far are (which may be incorrect): - Gold - Uranium - India - China? - Currency - If in the future USD is weak then which currency will be stronger (what currency should we hold) - Population Ageing (but on average poor) should we stay clear of this segment or look to invest in assets that may benefit from this trend. I am a newbie so please excuse any errors in the above - but keen to learn. Cheers John
    • RP
      Raoul P. | Founder
      11 August 2018 @ 08:41
      I think first deal with the trends at hand - strong dollar, EM weakness etc, then plan for if and how that knocks on and then once that is all in play, then and only then look t the opportunities for the other side. If not, you will be far to early and it can be hugely painful. There is probably 2 to 3 years between what we are developing now and the future opportunities.
  • MS
    Mitchell S.
    11 August 2018 @ 02:11
    There is an interesting piece from David Kotok included in Steve Blumenthal’s On my Radar from this week. Proposes that long term rates are being held down due to purchases for defined benefit plans. The favorable tax position disappears on September 15. Interesting that the charts of both are wedges that converge in the next two months. We will see who is right Raoul or Julian. I think both are right but on different time frames. Short term spike, then down again.
  • EL
    Elizabeth L.
    7 August 2018 @ 14:58
    Both of you have discussed the debt situation in Italy. If this debt situation becomes a major crisis and brings the Euro down creating a potential global economic crisis of sorts; wouldn't there be a global flow of capital into the dollar? Wouldn't that flow of capital bring US equity markets to new highs, especially the DOW??? Is this a potential scenario to be considered?? Thank you.
    • WM
      Will M.
      10 August 2018 @ 14:48
      Raoul/Julian love a response to Elizabeths critical question. I note that a strengthening dollar coupled with a soaring stock market is exactly what Martin Armstrong WEC & model has been predicting for decades.
  • sB
    sylvain B.
    8 August 2018 @ 07:39
    I agree with Julian, given the massive position in US asset by Japanese investors, will prevent the JPY from falling in a global bear markets. top 7 largest Jap insurers holds about $300billion in USD assets, whereas US investors hold virtually no assets abroad and have already repatriate the bulk of offshore cash. On the other hand despite all news favoring the USD (EU political concern, growth disappointment, trade war, yield differential), it hasn't been able to break 1.15. That tells me that USD is fundamentally weak and that there is a high chance of EUR resuming its bullish trend against broad negative consensus
    • WM
      Will M.
      10 August 2018 @ 14:43
      It is sooo difficult to see a strengthening Euro with the tensions in the EU. Are investors really going to remain tied to this manipulated currency when Italy is on the brink, immigrant policy divisions are growing, ECB purchases will not be capped as no-one else will buy their debt: showing Draghi screwed up! Brexit chaos still threatens. It just doesn't feel possible,....but then neither did 20 trillion US debt just 10 years ago. What do I know!
  • NH
    Neil H.
    7 August 2018 @ 19:08
    Since the Fed has a dual mandate how can they stop raising rates if inflation picks up and unemployment rate declines. Isn't the real risk that the Fed hikes 1 to many times.
    • JC
      Justin C.
      8 August 2018 @ 03:56
      Not sure what you're asking here, but those two factors will make them want to raise to avoid overheating. That said, the worry over the inverted yield curve may cause them to slow down on rate increases, which may create a significant overheating in the economy. Julian lays this out in his last monthly written report - a very interesting theory.
    • WM
      Will M.
      10 August 2018 @ 14:38
      I think Neil is simply stating that the Fed will be handcuffed (theoretically) by its dual mandate. If the low unemployment part is clearly already satisfied, then the inflation part will govern. Inflation (based solely on the "official" manipulated baskets; not a conspiracy theory but fact per John Williams excellent Shadow Stats site) has not materialized during all this money credit creation, as it did not filter into the economy, could start to accelerate and the Fed would want to desperately get ahead of it AND reload their chambers for the next inevitable downturn. Feels like just another 2 - 3 rate hikes might then spook the markets let alone spike the debt servicing costs. Feels like a "cytokine storm" for the economy.
  • MP
    Mark P.
    9 August 2018 @ 04:46
    GLDW, sorry.
  • MW
    Marco W.
    7 August 2018 @ 15:55
    Great point raised by Julian towards the end about the unwinding of Chimerica arrangement, which contribute significantly to the sustainable deflation and unusual profit margin in the past two decade.
  • DS
    David S.
    7 August 2018 @ 15:06
    Great insights. My novice brain is struggling to understand how a major risk-off unwinding would results in a surge in the dollar..? I get that US investors will bring their dollars home, but surely just as many foreign investors will move funds back to their own countries. Notably JPY. DXY seems highly correlated with the markets currently.. Or is this a matter of timing..? (Sell-off in foreign markets first followed by sell-off in US)
  • PC
    Peter C.
    7 August 2018 @ 13:14
    Thanks guys. Completely get the argument that financial conditions need to tighten before the macro & market unwind can take place. But how much does the very recent Chinese monetary and fiscal loosening impact this narrative? Clearly brings a stronger USD into play whilst Fed maintains QT and rate rises, but prior interventions by Chinese authorities have tended to fuel global reflation. Which is likely to dominate in your view? Or maybe both will at some stage and simply a timing issue?