Gold’s strong performance over the last two years must be seen as an acceleration in the deleveraging of the global financial system. After many decades of inordinate credit creation—leading to excessive debt levels, asset bubbles, and too much monetary interdependence between nations—the financial system has started to heal itself through a rising price of gold.
The geopolitical landscape is highly fluid, and the consequences of inaction could be severe. Major shifts generate immediate first-order effects, which can be anticipated to some extent. However, the real uncertainty lies in second-order reactions: nonlinear, difficult to model, and potentially destabilizing.
A wise analysis. Ten years ago I told friends to buy some gold. They laughed. Today they're buying each month from Costco at a much higher price.
Great analysis and arguments defending your bull case Jan!
The geopolitical landscape is highly fluid, and the consequences of inaction could be severe. Major shifts generate immediate first-order effects, which can be anticipated to some extent. However, the real uncertainty lies in second-order reactions: nonlinear, difficult to model, and potentially destabilizing.
Extremely informative, thanks for your research!