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Tag: gold

Tariffs Have Changed ‘Plumbing’ of Global Finance (Szn 7, Epsd 8)Podcast episode cover art featuring Axel Merk

Tariffs Have Changed ‘Plumbing’ of Global Finance (Szn 7, Epsd 8)

Published May 6, 2025

With Axel Merk, Merk Investments

Axel Merk of Merk Investments rejoins the podcast to discuss his view that Trump’s tariffs have fundamentally unbalanced the global financial order. This has created real risks, but also opportunities…

Content Highlights

  • The ‘plumbing’ of the global financial system has been upended as a result of tariffs (1:35);
  • China will not dump all their US Treasury holdings overnight. But tariffs will impact future flows. A fragmentation away from US dollar-denominated assets is likely (6:50);
  • Are tariffs inflationary or deflationary? They’re a supply shock: stagflation is the result (10:42);
  • If global trade is impeded and ultimately curtailed, how does this not end badly for economic growth? It will require a mental change from the existing environment. Fortunately, history has ample examples of this transition… (16:19);
  • Europe and China may face trouble in this new world order. So will Turkey. “There will be more tension” (24:45);
  • The case for gold and gold miners (32:16);
  • Does the US enter recession this year? Economic numbers are going to be distorted, so it may not matter. But the spike in imports heading into tariffs will almost certainly create inventory build-up… (37:18).

More on the Guest

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Recession Fears Are Overblown (Szn 7, Epsd 6)Podcast episode cover art feat Robert Smallbone

Recession Fears Are Overblown (Szn 7, Epsd 6)

Published March 18, 2025

With Robert Smallwood, The Contrarian Catalyst

Robert Smallbone, aka The Contrarian Capitalist, joins the podcast to discuss his view that recession fears are overblown and a fresh “blow-off top” is coming.

Content Highlights

  • Bearishness appears to have taken over markets. The S&P 500 just entered a correction. The guest is not buying that narrative (1:16);
  • The uncertainty created by the new US president may be intentional to lower bond yields — and interest rates (4:15);
  • European and UK stock indexes should have more upside ahead (7:21);
  • Background on the guest (12:46);
  • The view on gold and silver (16:11);
  • Crypto discussion (18:40).

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Trump Victory a Big Win for Cryptos, Small Cap Stocks — USD?AI-generated image of Donald Trump as 'roaring bull' with US dollar backdrop

Trump Victory a Big Win for Cryptos, Small Cap Stocks — USD?

Published November 7, 2024

Losers include all things renewable energy, bonds, China, and (for now) gold…

This post was originally published the morning of Nov. 6, 2024 in the Daily Contrarian.

The election is over. Trump won. That is going to have broad impacts, not all of which are apparent yet.

AI image of Donald Trump as raging bull against US dollar backdrop

The immediate impact of Trump’s victory appears to be a broad move to the riskiest of risk assets. Cryptos being Exhibit A. Small caps are forging ahead. You also have Tesla (TSLA) soaring overnight. Meme stocks are up too, but less.

The losers include all things renewable energy, with solar stocks taking it on the chin overnight. The Invesco Solar ETF (TAN) is down 9% at the time of this writing. Big oil, on the other hand, is gaining ground with Exxon Mobil (XOM) and Chevron (CVX) up 3% each at the time of this writing.

Financials are winners as well. Not just big names like JPMorgan Chase (JPM) and Bank of America (BAC) but regional banks. The SPDR S&P Regional Banking ETF (KRE) is up 8% overnight.

Another loser: China. The iShares China Large-Cap ETF (FXI) is down 2%+. Names like Alibaba (BABA), JD.com (JD) and PDD (PDD) are moving lower.

All That Glitters…

Just keep in mind that the immediate reaction to political events is not always the right one. In 2016 at this time there was a broad sell-off. One can expect things to be volatile, especially as retail investors take short-term gains…

That brings us to a first possible opportunity. There has been a pullback in gold overnight, a likely result of the ‘strong dollar’ trade ushered in by this Trump victory. There are three problems with this trade, however:

  1. Trump has railed against USD strength;
  2. Trump’s policies are widely expected to be inflationary. You’ve seen the resulting sell-off in bonds. That means a weaker USD;
  3. The Federal Reserve is cutting rates, which is also bad for the USD.

One would expect all of this to, in time, be good for gold. During Trump’s first term the precious metal rallied by 55%. Past performance is not always a guide to future results, but gold tends to do well under Republican administrations (+215% in eight years of George W. Bush).

Make no mistake, though: gold has been on a massive tear all year and only recently pulled back from all-time highs:

Still, if gold keeps dropping it may present a buying opportunity keeping items 1-3 above in mind.

Full disclosure: The Contrarian owns some physical gold as well as SPDR Gold Shares ETF (GLD) in a retirement account.

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