Gold, Bitcoin & Re-Financing Risks

Why More Liquidity Is Needed … And Not!

This article re-states our concerns and beliefs. It considers both why Global Liquidity is important and, paradoxically, why it’s also a hidden danger because it leads to monetary inflation. Monetary inflation is not high street inflation, but alongside cost inflation/ deflation they are components. Investors will need more monetary inflation hedges. Evidence the chart below which shows three lines – #1 Global Liquidity; #2 the value of monetary inflation hedges (a weighted hybrid of gold and cryptocurrencies) and #3 US high street prices. Gold and crypto (aka ‘exponential gold’) are great monetary inflation hedges, but not necessarily high street inflation hedges. [Note: separately we have shown using statistical techniques that Global Liquidity ‘Granger causes’ i.e. leads, Bitcoin from 5 weeks onwards and it leads gold bullion from 36 weeks onwards.]