Precious Metals ‘Perfect Storm’ As MSGM Risks Align
There is a frequent tendency to over state the importance of the Fed and its policies and ignore the primary fundamentals driving the gold market which are what we have long termed the ‘MSGM’ fundamentals.
As long as the MSGM fundamentals remain sound than there is little risk of gold and silver’s bull markets ending.
What we term MSGM stands for macroeconomic, systemic, geopolitical and monetary risks.
The precious metals medium and long term fundamentals remain bullish due to still significant macroeconomic, systemic, monetary and geopolitical risks.
a) Macroeconomic risk is seen in the risk of recessions in major industrial nations with much negative data emanating from the debt laden Eurozone, UK, Japan, China and U.S. in recent days.
It remains difficult to pinpoint the nature of the coming recessions and possibly a Depression and whether it will be deflationary, inflationary, stagflationary or the less likely but possible none the less ‘Black Swan’ of hyperinflation.
Deflation remains the primary concern of most policy makers, politicians, bankers and investors.
However, the risk of deflation is a short term one and the monetary policy response or M means that various forms of inflation remain the medium and long term threat.