Macro views from Lyn Alden about printing money, dollar index, gold & bitcoin

Manage
1

Super interview about topics I never understood well. She explains it so well. Gets really good 20min into it.

In short after one listen

  • Why dollar is so strong after decades of deficit
  • How printing money works, and works well for countries that can do it
  • But Dollar Index should eventually drop to 80 from 100 in a few years ( a good thing)
  • Gold going higher
  • Bitcoin not as crazy anymore

Enjoy

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2

Thank you Marco.

Looking at this in an entirely different way this weekend (Adaptive Allocation using MPT and constructing a Minimum Variance Portfolio) I had decided to buy GLD tomorrow. A friend of mine is buying GBTC (Bitcoin) and gold for similar reasons.

Good to see that there a solid theory to support this.

Best,

Jim

3

Second your sentiment, Jim. I’ve been increasing positions in 401k and after tax account to gold and gold derivatives. Been also reducing governmental bond exposures as well.

Jeff

4

Did someone say bitcoin?

Paul Tudor Jones Buys Bitcoin as a Hedge Against Inflation
https://www.bloomberg.com/news/articles/2020-05-07/paul-tudor-jones-buys-bitcoin-says-he-s-reminded-of-gold-in-70s

Every 4 years, the supply of new bitcoin gets cut in half, doubling its stock-to-flow:
https://medium.com/@100trillionUSD/modeling-bitcoins-value-with-scarcity-91fa0fc03e25

Gold bugs will often use stock-to-flow to estimate the valuation of gold, citing its high stock-to-flow relative to say, silver, copper, etc. Well bitcoin is more scarce than gold, and very quickly will have a higher stock-to-flow than gold.

5

Jim, you should rather trade gold mining stocks instead of GLD. Here is a model that periodically holds one position from NEM, AU, or SBSW.
Uses Basic: Momentum ranking system from P123.

https://seekingalpha.com/article/4340858-profiting-from-expected-uptrend-of-gold-momentum-trading-strategy-of-gold-mining-stocks

Return (%) as of 5/16/2020
Year To Date 53.78
Month To Date 14.16
4 Week 14.64
13 Week 34.89
1 Year 288.40
3 Year 370.87

6

Georg,

Thank you. I have read articles by fundamental analysts who agree with you 100% about the miners.

I will look closer at your suggestion.

Best,

Jim