Thread by @ithoughtadviser

Why gold should be the asset to focus on for the next few years?

#gold #investing #wealthcreation

A Thread!

1/13

M2 which is a broad measure of money supply, has grown 81% in the last 7yrs to nearly $20Trn. An increase in the supply of money typically lowers interest rates, which generates more investment and puts more money in the hands of consumers. Hence stimulating spending.

#gold
2/13

Bonds struggled during the last major stagflationary period, in the late 1960s. Rise in oil prices,unemployment, loose monetary policy pushed the core CPI Index to a high of 13.5%. The Fed had to raise interest rates by nearly 20%.

#gold #bonds #interestrates

3/13

US Fed’s balance sheet has doubled from $4.2trn to $8.2trn since 2020 to finance the Govt deficits. Monetary stimulus was a common theme for all central banks around the world. Such a financial debasement is very bullish for Gold.

#FED #gold

4/13

By roughly doubling the size of its securities holdings since the start of the pandemic, the Fed helped stabilize financial markets, by purchasing assets. Since June 2020, the Fed has been buying $80 bn of Treasury securities and $40 bn of agency MBS each month.

#markets

5/13

In 2020 gold was up 20% YTD, but this year it has gone down by nearly 6%. The current bull market has a long way to go given the fact that interest rates are going to remain low for a long time ahead.

#interestrates #markets

6/13

Since the start of the pandemic physical gold demand has been the highest since 2006!

Surprise..Surprise…

#gold #pandemic #COVID19

7/13

Interesting data point to note here is that the rest of the world has been stocking up on gold ever since the GFC crisis. The RBI was the largest buyer in Q3FY21. Gold reserves grew by 41t to 745t. This marks a slight increase in the pace of buying by the RBI since 2009.

8/13

There’s this narrative in the market saying, “money that had to go into gold went into Bitcoin”. Not True.

#gold #market #money

9/13

Coming to Gold Miners. We had done a Podcast with @shyamsek and @HarshilNichani on the same. They highlighted that gold miners are in the best shape of their lives. With no major capex coming in, as long as gold prices move up, they will continue to throw out free cash!

10/13

Again, gold miners also have a long waaaaay to go…!

#gold #goldminers #investing

11/13

People compare gold to equities. Over 20 years if you notice Gold has managed to generate an average around 9-12% return. Last we checked, over the same time frame equities also tend to generate the same return. *Risk-adjusted Return*. Gold is no risk baba.

#gold #returns
12/13

It’s not gold vs equity. The correct comparison is Gold vs Currency. USD has not strengthened much in the last 40yrs. Gold has grown at a CAGR of 1.75% whereas USD has grown at 0.2%. And Dollar is the reserve currency of the world. *sigh*

#Dollars #gold #equity

13/13

Podcast on Gold Miners!

Tune in to know more!

#gold #podcast #tunein

open.spotify.com/episode/2ApKIc…