Introduction
Michael Howell, the founder and CEO of Crossborder Capital, a London-based independent research and investment company, has provided a unique perspective on the current state of the economy. Contrary to the prevailing narrative of monetary tightening, Howell argues that there has been a rise in liquidity, which is expected to have a positive impact on stocks, gold, and cryptocurrencies.
Michael Howell: A Veteran in Global Finance
With over $1 billion in assets under management, Crossborder Capital is a trusted name in the financial industry. Michael Howell, as the CEO and founder, brings decades of experience in global finance. Previously, he held key positions at Baring Securities and Solomon Brothers, gaining a deep understanding of international finance and economics. Today, Howell is recognized for his expertise in analyzing global liquidity trends and their influence on markets.
The Rise in Global Liquidity
Howell challenges the widely-held belief that the Federal Reserve has been tightening monetary policy. Instead, he argues that the Fed has been injecting liquidity into the markets, albeit subtly. Despite the reduction in the Fed's balance sheet, Howell highlights that Fed liquidity actually increased by 12 to 15% last year. This trend is not a temporary phenomenon but part of a longer-term pattern of monetary inflation.
Shadow Quantitative Easing and Yield Curve Control
Howell identifies a covert strategy employed by central banks globally, which he refers to as shadow quantitative easing and shadow yield curve control. He points out that the draining of the Reverse Repo (RRP) facility and the Bank Term Funding Program (BTFP) significantly contributed to the rise in Fed liquidity. He predicts that central bank liquidity will continue to increase, especially once the RRP is fully drained, and even suggests the possibility of renewing the BTFP.
The U.S. Treasury's Impact on Liquidity
Howell highlights the strategic decision of the U.S. Treasury to shorten the maturity of its debt issuance. This move mechanically reduces the private sector's liquidity needs, particularly benefiting the banking sector in managing its overexposure to duration. This adjustment may lead to a transition from a rebound phase to a calm phase in the market. Historically, the financial sector and high-beta securities, including cryptocurrencies, have performed well in such calm phases.
The Potential of Cryptocurrencies
Howell suggests that cryptocurrencies may experience significant positive effects from the rise in global liquidity. He believes that younger generations see cryptocurrencies as a hedge against monetary inflation, similar to gold. The increasing interest in digital assets among younger investors may lead to cryptocurrencies surpassing gold as the preferred investment vehicle.
Conclusion
Michael Howell's argument about the impact of global liquidity on liquidity-sensitive assets like stocks, gold, and cryptocurrencies offers a fresh perspective. His analysis challenges the prevailing narrative of monetary tightening and emphasizes the positive effects of liquidity on these assets. As the global economy continues to evolve, it is crucial to consider alternative viewpoints and explore the potential opportunities arising from shifts in liquidity dynamics.
Frequently Asked Questions
Should you Invest In Gold For Retirement?
It depends on how much you have saved and if gold was available at the time you started saving. If you are unsure of which option to invest in, consider both.
Gold is a safe investment and can also offer potential returns. Retirement investors will find gold a worthy investment.
While most investments offer fixed rates of return, gold tends to fluctuate. Its value fluctuates over time.
However, this does not mean that gold should be avoided. It is important to consider the fluctuations when planning your portfolio.
Another benefit to gold is its tangible value. Gold is less difficult to store than stocks or bonds. It is also easily portable.
Your gold will always be accessible as long you keep it in a safe place. There are no storage charges for holding physical gold.
Investing in gold can help protect against inflation. Gold prices are likely to rise with other commodities so it is a good way of protecting against rising costs.
Also, you'll reap the benefits of having some savings invested in something with a stable value. Gold tends to rise when the stock markets fall.
You can also sell gold anytime you like by investing in it. You can easily liquidate your investment, just as with stocks. You don't even have to wait until you retire.
If you do decide to invest in gold, make sure to diversify your holdings. Don't put all of your eggs in one basket.
Do not buy too much at one time. Start with a few ounces. Next, add more as required.
It's not about getting rich fast. Rather, it's to build up enough wealth so you won't need to rely on Social Security benefits.
Although gold might not be the right investment for everyone it could make a great addition in any retirement plan.
Can the government steal your gold?
Your gold is yours, so the government cannot confiscate it. You earned it through hard work. It belongs to your. This rule may not apply to all cases. You could lose your gold if convicted of fraud against a federal government agency. Also, if you owe taxes to the IRS, you can lose your precious metals. However, even if taxes are not paid, gold is still your property.
What precious metals can you invest in for retirement?
Silver and gold are two of the most valuable precious metals. They are both simple to purchase and sell, and they have been around for a long time. These are great options to diversify your portfolio.
Gold: This is the oldest form of currency that man has ever known. It is also extremely safe and stable. Because of this, it's considered a good way to preserve wealth during times of uncertainty.
Silver: Investors have always loved silver. It is an excellent choice for investors who wish to avoid volatility. Silver, unlike gold, tends not to go down but up.
Platinum: A new form of precious metal, platinum is growing in popularity. It's durable and resists corrosion, just like gold and silver. It's also more expensive than the other two.
Rhodium: The catalytic converters use Rhodium. It is also used to make jewelry. It is also very affordable in comparison to other types.
Palladium: Palladium is similar to platinum, but it's less rare. It's also much more affordable. Investors looking to add precious and rare metals to their portfolios love it for these reasons.
Statistics
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
External Links
cftc.gov
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear In 1991 – WSJ
- Want to Keep Gold in Your IRA at Home? It's Not Exactly Lawful – WSJ
investopedia.com
bbb.org
How To
How to keep physical gold in an IRA
The best way of investing in gold is to purchase shares from companies that produce gold. However, there are risks associated with this strategy. It isn't always possible for these companies to survive. If they survive, there's still the risk of losing money due to fluctuations in the price of gold.
You can also buy gold directly. You will need to either open an online or bank account or simply buy gold from a reliable seller. This option has many advantages, including the ease of access (you don’t have to deal with stock markets) and the ability of making purchases at low prices. It's also easier to see how much gold you've got stored. You'll get a receipt showing exactly what you paid, so you'll know if any taxes were missed. There's also less chance of theft than investing in stocks.
There are however some disadvantages. You won't be able to benefit from investment funds or interest rates offered by banks. It won't allow you to diversify any of your holdings. Instead, you'll be stuck with what's been bought. Finally, tax man may want to ask where you put your gold.
BullionVault.com offers more information on buying gold for an IRA.
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By: David Sencil
Title: The Impact of Global Liquidity on Stocks, Gold, and Cryptocurrencies
Sourced From: news.bitcoin.com/michael-howell-predicts-continued-surge-in-global-liquidity-benefiting-stocks-gold-and-crypto/
Published Date: Tue, 23 Jan 2024 05:00:09 +0000
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