20190828-Marin Katusa-Throw Everything You know out the Window

Marin Katusa (Throw Everything You know Out the Window):

Two major trends:

1.  Negative interests

-The yield on the 2-year note is higher than the yield on the 10-year bond.  Yield curve inversion is a classic economic signal that a recession could be in the works. It’s not a guarantee, but highly probable. In the United States, each of the last 7 recessions has been preceded by a yield curve inversion.

-All of this is fueling the fear trade and sending gold to record prices in almost every currency.

2. The mighty U.S. Dollar is actually rising with the price of Gold.

 -For generations, it was established that…

·   A falling U.S. dollar meant a rising gold price, and

·   A rising U.S. dollar meant a falling gold price.

·   I’ve stated for several years now that the U.S. dollar will be very strong.

 ·   Ironically, it’s the most hated currency of gold bugs. But yet, what other currency would you rather own?

        ·   USD’s are accepted everywhere I travel. It’s in demand, no matter how much the        Fed  prints (because let’s be real, all other governments are printing just as much, if not more).

 ·   I also own physical gold as my financial disaster insurance. And as we’ve shown, it’s recession insurance.

  ·   In addition, I have invested millions of my own money into the best gold producers and developers. This gives me extra leverage to rising gold prices.

 ·   Up to now, it was conventional wisdom that when the USD rises, gold falls.

 ·   Not anymore.

 ·       Welcome to the new normal.

 His investment thesis:

Cash: I remain bullish on the U.S. dollar relative to other major currencies. Even if the U.S. Federal Reserve cuts rates, other countries are going to continue to cut rates also. NIRP is not an anomaly that will be ending very soon.

·       It’s the new normal and will be around for at least a few years, maybe even much longer.

·       This means that the U.S. dollar will remain strong relative to these other currencies. I don’t see another currency I’d rather own at this point.

Gold: Across the world interest rates are falling and heading for negative territory. This is bullish for gold.

·     In addition to my physical holdings, I remain long the best managed and leveraged gold producers and gold developers that are run by management with skin in the game. These leveraged plays provide significant upside to rising gold prices.

·     I expect the volatility in the markets to continue for the foreseeable future. This provides both increased risk and increased reward. It’s a fine balance we must play as speculators and investors.