No. of Recommendations: 6
Just reading an article there referencing the economic and market events of this week (Inflation hanging around, commodities rising, equities falling etc.) Investors buying gold and crypto as a hedge.
My thoughts are -
I fear the only hedge that will work if inflation gets sticky, (causing another 2022 type equity sell off, perhaps exacerbated by sovereign debt growing concerns of swimming towards the default vortex, combined with an injection of old fashioned fear, not seen for a while and central banks unable to rescue this time) are long dated out of the money puts on the most speculative equity securities, of which there are many to choose from. Or maybe it’s time to buy the VIX. The stress on the global financial system looks immense. The lack of concern from market participants and buy-in to the Goldilocks soft landing is mind boggling, in the face of a wall of challenges/risks (crypto vapour event, deglobalisation/trade war, Middle East war, US equity valuations, mean reversion of highest profit margins ever, wealth gap acceleration, political instability and government deficits at eye watering levels, unfunded government liabilities which are unpayable. A society stacked against youth).
This AI productivity boost better live up to the hype, if assets are to avoid being “good until reached for”…but truth be told, not one person, or economist has the faintest idea how this plays out. A time for prudence and cautious optimism at best.
