NEW QUICK VIEW (@ 2020-07-29 16:50:45)
Here are two interesting numbers for you: total market cap of gold was $9 trillion as of May 2020 (since when prices have gone up by some 15% so as of today it’s probably closer to $10.5 trillion). Meanwhile, total amount of outstanding US debt is $26 trillion as of today. Japan and major European countries would easily add another $22 trillion to that number to get to $48 billion of potentially low to negative yielding debt at enormous risk of the principal getting eaten by inflation of sovereign debt confidence crises. If investors in the past allocated to these assets for their negative correlation and diversification characteristics, it’s fair to conclude that story has now played out. If even 5% of investments in DM sovereign debt shift into gold, that could mean another 23% appreciation in gold price from here. -Albert Ingles
