KEY EVENTS:
Debt Markets yielding historically low returns now •. US FED tapering (reducing liquidity) will start soon • Equity Market Valuations are definitely stretched by all metrics (PE, PB, Marketcap to GDP) • Global Strategy of China+1 & more
When the US fiscal deficit was high AND when the US debt to GDP was high AND when the US printed money abundantly, gold performs better. This was the situation in between 1970-80, 2000-2011. Today we are seeing a gold run again. The current situation is familiar- US debt to GDP is high and the US Fed is printing money every day and gold should do better as per historical patterns. But based on the past 10-year historical returns, investors are still skeptical about adding gold. The article looks at how safe is it invest in gold and in what proportion?
