Is inflation transitory or not?
Is inflation here to stay?
It is the big question of the summer. While the FED is cautious about saying too much about inflation Experts left and right are warning of rising inflation. The big question now is, what are the big structural drivers for inflation. A big factor was the velocity of money. In the last months, due to lockdowns, it has been very low. Now with the economy opening up again, velocity is rising and is hitting this newly created wall of liquidity. We now also creating money in a completely different way than before. Other inflationary factors are demographics, the new Cold War as well as many more. This also means that equity markets will suffer over the next years.
New fireworks in Gold?
Gold did its job very well in the last year and defended the portfolio like not many others could. But then a stronger US Dollar, competition from Bitcoin and especially rising rates on the US 10-year Bonds led to a correction in Gold. This year in march we then saw a double bottom with an all-time high in negative market sentiment. Now gold is near at its all-time high again and nobody cares. This is a great setup and we can expect new all-time highs soon.
Silver is looking explosive!
Silver is the next big opportunity. It is currently trading above the 50-day moving average and the chart is looking really explosive. But silver is not only some leveraged gold, many factors point towards silver being a great buy. First, silver outperforms gold during inflation. It also greatly profits from the green wave, as it is used extensively in electronics.
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