The Big Story: Gold & The Dollar – Part 2

Featuring

Brent Johnson continues his mission to flesh out his view that a stronger dollar is eventually going to cause the problems that leads to gold’s rise. Having spoken to gold market experts in Part 1, Brent now delves deeper into the macro landscape and talks to two dollar bulls and two dollar bears, to stress test his thesis. The series concludes on Friday with a full length interview with gold market legend Peter Schiff.

Published on
16 October, 2017
Topic
US Dollar, Gold, Macro
Duration
34 minutes
Asset class
Commodities, Bonds/Rates/Credit, Equities
Rating
54

Comments

  • TB

    Tad B.

    16 11 2017 19:43

    0       0

    I thought this was good. don't know why people hammer these vids.... it's all good info, from good people. do your own D/D regarding investments: It's not 'investment advice'.

  • RM

    Robert M.

    28 10 2017 05:40

    0       0

    I have adopted Mike Oliver's momentum indicator into my own process (thanks Mike).
    However I have reservations with Mike's analysis on a definitive DXY momentum up-trend line breakdown because there is a larger momentum up-trend line from 2004 (not shown by Mike) that has only been broken recently and mildly.
    This leaves open the possibility of a Oct 98 type pattern thus new highs ahead.

    • DC

      D C.

      2 11 2017 17:25

      1       0

      That Mike Oliver indicator is pretty useless if you backtest or even just eyeball it with a bunch of different instruments. Rarely will you see any divergence with price action.

  • SG

    Sherman G.

    27 10 2017 02:26

    0       1

    I would appreciate the interviewer not interrupting the interviewee with the, uh huh, uh huh, indicator that he "already knows that." There are several alternatives to this that you can adopt but from the viewer's perspective, the use of "hurry up!" interruptions is an awkward distraction.

  • DV

    Daniel V.

    21 10 2017 01:26

    2       0

    Brent - good analysis! Appreciate your interviews.

  • PM

    Paul M.

    18 10 2017 12:10

    6       0

    Nice overview for sure, however, once again there is this fairy tale about some extreme bearish positioning in USD right now. I'm not sure where these guys are getting their info from but if you look at CME CFTC reports in DXY, you'll see that the spec. positioning is pretty neutral (slight negative). It makes sense too as large long spec. position in EUR is offset by a large short position in JPY (two of the largest contributors to the index). So how is spec. positioning extreme? I don't see it.

  • dj

    daniel j.

    18 10 2017 10:53

    0       0

    This sounds like long USD/BRL right?

  • MS

    Matt S.

    17 10 2017 14:33

    6       21

    Where to begin.......

    Firstly, RV, you need to start doing "wristwatch checks" at the start of every video! I'm seeing (and imagining) that some of these fat-cats are sporting some pretty sweet watches under those fine tailored suits - let's see 'em!

    Next - for the 100th time....... pleeeeeeeeeeeease do a series on the fundamentals of macro know-how. I understand maybe at best 50% of what these smart cookies talk about - what's the point of an ongoing subscription if hardly any of it makes sense? I know I'm not the only one... so reach out a helping hand to us noobs, thanks.

    Thirdly - love the rockin' music! (just saying that to annoy those who hate it) ;p

    • JC

      Ja C.

      17 10 2017 21:53

      10       0

      Plug these three words in your favorite search engine: macro economics youtube. Enjoy

  • EC

    Edward C.

    17 10 2017 13:19

    3       0

    Torn between Jesse and Brent and so may smart opinions on either side. If we get any kind of tax relief as Raoul has been alluding, do we get a significant repatriation of dollars along with a liquidity squeeze in the Eurodollar market to send the dollar higher on the back of rising rates due to increased FED QT and Treasury issuance??? Must take equities lower??? Meanwhile Jesse's references to federal deficit a definitive warning. I personally cannot trade this. I am a long term gold bull....but near term, 1-3 years, very difficult. For any non invested cash, I think I'll hedge across physical, yen, chf, usd and euro with a tiny amount to crypto. Happy to hear smarter ideas....need all the help I can get in these markets!

    • JC

      John C.

      20 10 2017 19:33

      2       0

      Not that I'm a dollar bull, and I'm definitely long gold now esp miners, but I just can't get my head around why people are Yen or Euro bulls at this point. Nothing is fixed in Europe and it's probably getting worse as we head into winter, and meanwhile Kuroda seems set to continue on in Japan. You have potential tax deals and repatriation back home in the US plus the potential for a global USD squeeze and for China to devalue a bit after this week's congress. Good video got me thinking!

  • km

    kenneth m.

    17 10 2017 11:53

    3       0

    I understand and agree with Brent's point about the supply/demand issue with the dollar, due largely to dollar denominated debt. But, what if the answer to debt is that everyone (or many countries) decide that they are just going to default, because their economies can longer bear the debt (especially with rising rates)? I know the arguments against this. But, if you are failing and near revolution, who will care about the morality of this? In fact, the Populist response would be that the banks are to blame for everyone's problems (with some justification, for sure) and thus it is very moral to default. If everyone - or a lot of people do it, will there be any penalty for governments simply defaulting? I am sure that someone must be thinking/talking about this - but, I do not hear much about this possibility and what the potential impacts of such a series of actions may be. This seems like a very likely outcome to me, as a matter of human nature.

    • HM

      Hot M.

      18 10 2017 03:17

      4       0

      When left to government, default probably means repaying debt with depreciated currency, depreciating financial asset values ie, the revaluation of financial vs real assets, etc. You seem to be describing a breaking point. I think this is in the back of everyones mind. We're playing musical chairs in the interim.

    • JC

      John C.

      20 10 2017 19:37

      0       0

      While I see your point and ultimately you might be right, the USD would have to go on a massive run to create a situation whereby countries are defaulting on their USD-denominated debt. We seem to be pretty far from there. But any market crash 'flight to quality' could also cause USD strength I'd assume. Still having trouble with that notion as I'd assume we'd also get a rush to Treasurys, much tighter spreads during this 'flight to quality' and the US equity market would tank along with the USD rising. But this past year Treasurys have pretty much gone the opposite way of the USD mostly.

  • SS

    Steven S.

    17 10 2017 11:31

    0       0

    Understanding these guy's like I did Greenspan before he was the Fed Chairman. Because nobody said anything about inflation. Hiking Rates to curb inflation.

  • KS

    Kazi S.

    17 10 2017 11:10

    0       2

    Watching these interviews, I always wonder when t was filmed vs published, and whether some of the participants are touting their own horn.

    • MS

      Matt S.

      17 10 2017 14:35

      0       1

      tooting*

  • js

    jacob s.

    17 10 2017 02:07

    8       2

    shot term - dollar up. long term - dollar down.

    • JC

      John C.

      20 10 2017 19:38

      0       0

      Ok but against what? I'd argue that most of the fiat currencies including the Euro and Yen are going way down long term. That means be long gold & crypto. But not long Euro/Yen/etc.

  • HJ

    Harry J.

    17 10 2017 01:30

    0       4

    And short and long term gold forcasts?
    Actionable trades?

    • HM

      Hot M.

      17 10 2017 02:20

      4       0

      I think a large part of the value in RV and these types of vids is how it correlates with views I already hold - does it bolster, caution or not materially change my own convictions.

    • RL

      Rui L.

      17 10 2017 08:45

      2       0

      for what is worth, IMHO ... Harry there is a clear D1 H&S in the DXY and the EUR with clear trend violation. that according to classic charting may help on managing an actionable trade.

    • RL

      Rui L.

      23 10 2017 19:31

      0       0

      https://www.peterlbrandt.com/a-possible-turn-in-direction-us-dollar-index/

  • DT

    Dave T.

    17 10 2017 01:00

    1       0

    Regarding gold: when, if at all will the yuan-oil-gold story from China begin to influence gold?

    • EC

      Edward C.

      17 10 2017 13:22

      3       0

      IMHO, not for a very long time. $ will continue to dominate global trade as reserve currency for a least a number of years to come and additionally, the Yuan will not be backed by gold. Having a physically settled gold contract denominated in CNY as well as a CNY oil contract is very different from a gold backed currency. With the debt in China, Gold backed ccy impossible at this stage.

  • RA

    Robert A.

    17 10 2017 00:23

    24       2

    Nicely done Brent and RV! Hearing two opposing views from those qualified to express them is especially valuable to me from a position sizing standpoint. First, it helps me to not oversize a position either long or short when I hear very well thought out arguments as to why my position might be wrong. Secondly, opposing arguments on Timing are again very helpful to me in not oversizing a position---even if I have gotten over the first hurdle of deciding to ignore/refute/minimize the opposing arguments and to size up my position....hearing those well reasoned arguments contrary to my views on a short to medium term basis can keep me from sizing up TOO EARLY. This counter argument format is especially helpful to me personally and is yet another reason why I am such a loyal RV subscriber!

  • JH

    Jesse H.

    16 10 2017 23:59

    3       19

    Nothing new here, unfortunately...but good to get different perspectives. Hope RV is not losing its mojo. Second disappointing video in a week, in terms of quality and depth, in my view.

  • EH

    Edwin H.

    16 10 2017 19:50

    6       0

    One point I would like to bring up is Brent stated: "Most of the street is betting rates will go lower". I am seeing the completely the inverse of this. http://www.marketwatch.com/story/bond-market-bears-are-back-with-a-vengeance-in-one-chart-2017-10-03

    Please let me know where you are getting your data. We can always learn more as a team!

    Great video!

    • BJ

      Brent J.

      16 10 2017 22:02

      9       0

      Hi Edwin - thx for your comment. Was that my exact quote? I'll go back and listen. If so I may have misspoke. Point I was trying to make was that most of the street expects rates to rise, they expect it to be slower than what the Fed is guiding to. Also, this was filmed 3 weeks ago. At that time (according to bloomberg) the market was pricing a 60% chance of a Fed hike in Dec. in the last 3 weeks that has risen to over 75%. And then also pricing in one raise in 2018. I just think that is going to end up being wrong. We will see! Thanks. Brent

  • TJ

    Terry J.

    16 10 2017 19:33

    6       0

    Brilliant! RV at its very best offering persuasive opinions for both the bull and bear cases for the greenback, along with the implications for gold and other asset classes.

  • T~

    Tshort63 ~.

    16 10 2017 18:40

    5       1

    Really enjoyed this episode and appreciated hearing from both strong and weak dollar perspectives. I like those who rely more on structural terms and less on momentum or FED speak. I often agree with Jesse [ not that he cares ;-) ] as he thinks mostly in structural positions. I found it interesting that the European guest saw the dollar as strong (grass is always greener?) while the female guest saw things with a hit of convexity, which is a subtle take on the strong dollar position. I always cut to the chase: which currency is not subject to distortions or major manipulations, Gold.

  • rr

    rlw r.

    16 10 2017 17:54

    9       0

    Really enjoyed Brent's 'stress test' - offering his understanding and then seeking others with the two opposing viewpoints.
    Way good.

  • HK

    Himali K.

    16 10 2017 16:09

    7       1

    Jesse Felder echoes the same sentiment in terms of Fed hiking before a recession as James Rickards.. interesting...