Let's turn to Gold 1st and then to a Bitcoin.
What? What? Talk me through your position on both of
those.
Well, gold is an interesting juxtaposition with what we're seeing
with regard to the Goldilocks and soft landing narrative.
You wouldn't expect gold to be doing what it's doing
if we're truly going to have a soft landing and
you got cyclical stocks and small caps and others outperforming.
So one of the things that to me is a
big factor there outside of what's happening in the Middle
East and some of these other issues that are creating
some angst is the fiscal situation here in the US.
If I'm an as prudent investor and I see that
the US is going to run another close to $2
trillion deficit and we're going to have to issue new
treasuries and we're going to be at,
I don't know, 40 trillion total debt before long.
I don't want to own Bitcoin and I'm probably a
little leery of the Fiat currencies like the dollar.
Gold is a great place to invest and I think
that's a big part of what's going on.
Ultimately over time though, you wouldn't expect gold to be
rallying.
If we're truly going to have a sustainable stock market
rally and a true soft landing and Goldilocks type environment,
that's one of those things we need to keep an
eye on that potentially could be a red flag.
How about Bitcoin?
Bitcoin is a risk asset.
Bitcoin is not a substitute for Fiat currency.
I think that the comment was digital gold.
I I wouldn't call it that.
Bitcoin's purely a risk asset.
Bitcoin is something that you own when when risk is
up,
when risk appetite is up.
And the other thing is Bitcoin does the best when
liquidity is flush,
we're seeing liquidity come out of the market.
Treasury liquidity is declining during tax season,
probably temporary given it's an election year.
But as liquidity declines, Bitcoin hit an overbought level.
You're going to see Bitcoin suffer from that.
But I would never want to own Bitcoin in lieu
of the dollar or other Fiat currencies because I was
concerned about the fiscal situation.
But that is the entire argument that Bitcoin bulls make.
Do you think it's time to put that to rest?
What are they seeing and when does it maybe act
like a safe haven?
Bitcoin bulls are talking their book because they're invested in
Bitcoin and they want to see it go up.
Personally, I've yet to see it at some point in
time.
If cryptocurrency becomes regulated by the central banks around the
world,
that'll be a different story.
But then it won't be nearly as volatile as it
is today and you won't have the opportunity for the
gains you have now.
But as of right now,
I just don't see it and we don't see it
as a viable alternative to the dollar or the Fiat.
OK, Let's talk about actual gold,
the precious yellow metal.
An idea that I talked about with the guests last
hour is the fact that if
China's economy is recovering and you're seeing the consumer bounce
back there,
are they going to be spending their money on gold?
I mean traditionally, typically that has been what has happened.
But with more investment options,
perhaps the stock market, which has been under so much
pressure,
do you think that happens this time around?
Could that that sort of underpin higher gold prices?
Well, I think you're talking about reserves going into the
gold and out out of the dollar and I think
that is obviously something that could happen.
The problem is or the
the headwind to that theory is that there's no market
in the world that's large and liquid as the US
Treasury market is.
So as countries like China are developing reserves and they
need a place to park the reserves,
there's still going to be demand for treasuries.
Gold will take a piece of that.
But I don't think that really is a threat to
the US Treasury market or the dollar in general longer
term.
But yes, near term, particularly given with what's going on
here in the US,
rates are going to come down.
The fiscal situation doesn't look particularly attractive.
I can see central banks around the world looking at
gold as an alternative,
at least in the short term,
to the US dollar and treasuries.
I was actually thinking about consumers,
but it's a good point.
So maybe both of those together.
David, thanks very much for being with us today.
David Spica.