FEB 7, 2018
The checkboxes keep getting checked; the macro environment backdrop for a significant gold price rise is coalescing more and more every day. And the weak USD is at the fore.
The last time the USD fell through such an important technical level and signaled the start of the multi-year downtrend was in 2003 to 2004. During this period, we had China emerging as the new powerhouse for global GDP growth, and as China boomed on the back of a falling USD, rising economic middle class, and accelerating economic growth, we saw global commodities enter one of the best multi-year periods since the inflation boom of 1974 to 1980.
The first and most obvious positioning strategy is to allocate capital into energy stocks and other inflationary beneficiaries. Commodity producers and anything that have business models hedged for rising inflation will benefit. Hard assets like gold.
Most investors are not prepared for what is about to come. Global markets are already signaling clearly to us that global inflationary forces are on the rise, and as the USD continues to decline, the signal will only grow stronger.
ORIGINAL SOURCE: Global Markets Are Signaling Inflation Is Coming. What Does It Mean For Investors And Your Portfolio? by HFIR at Seeking Alpha on 2/7/18