Scarce Assets

The Fed decided no rate cuts yesterday, but that doesn’t mean negative interest rates are off the table for good. More of your opinions on what to do in case…

“I think everyone should have some cash in hand. Not just U.S. dollars but other currencies. I have U.S. and CAD.

“Gold, silver and a bank account out of the country — that would be good. I have three. No money (well, less than $100 to keep them open) in two accounts and money in the other.”

And this reader’s hedging his bets:

“I’m already a fan of gold, silver, bitcoin, etc, and if negative interest rates happen, that’s only going to make verifiably scarce, hard assets that much more desirable.”

We think our reader’s onto something. We’ve already gone on record in favor of gold and silver.

But crypto is something we hadn’t thought of in case of negative interest rates. In that instance, do you think investors will fall in love with crypto… all over again?

How about you?

Your Rundown for Thursday, Dec. 12, 2019:

A Case of the Grumpies (And A Case for Gold)

Yesterday, we reported on the phenomenal performance of technology stocks in 2019 — despite trade war back-and-forth. Tech stocks? Up 40%. And the S&P 500 index is up 25%.

But a reader disagrees…

“All lies,” he says. “Gold and silver are both down; stocks are real losers. It’s all B.S.”

(S.A.D is real, people.)

To provide some perspective, the S&P 500 Index, the Dow and the Nasdaq 100 Index have risen 25%, 19.5% and 32% respectively this year.

As for gold, we read at CNBC: “Goldman Sachs is a big believer in gold for [2020], and one of the main reasons is the advent of an increasingly popular economic approach that encourages government deficit spending.”

Hmm… That’s Modern Monetary Theory (MMT) that means the government of a nation that prints its own money is not constrained by revenue deficits. Spend it up, in other words; governments can always print more money. (We’re being simplistic… but you get the idea.)

According to Goldman, the mere whisper of MMT “can cause worry about currency debasement and rampant inflation,” says CNBC, “both historically strong backdrops for gold.”

In that case, Goldman predicts gold surging to $1,600 per ounce in 2020; we think $2,000 is just as likely.

Market Rundown for Thursday, Dec. 12, 2019

S&P 500 futures are up 32 points to 3,173.

Oil’s up 83 cents to $59.59 for a barrel of WTI.

Gold is down $3.70 this morning — to $1,471.30 per ounce.

Bitcoin is down $39.87 to $7,206.77.

Have a great day! We’ll talk tomorrow.

For the Rundown,

Aaron Gentzler

Aaron Gentzler

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Aaron Gentzler

Aaron Gentzler is the publisher of Seven Figure Publishing. He is also the editor of The Rundown and has been with Agora Financial / Seven Figure Publishing since 2005. He's been covering technology and markets for over a decade.

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