Hi, no news appears to be good news on the surface right now. The panic over Deutsche Bank appears to have subsided for now? There is now talk of “no need to worry” and “time to get back into stocks” BSSSSSSSSS!

As I shared on Twitter yesterday, this is the same playbook as the run-up to the 2008 crash “They aren’t saving the financial system. They’re buying the banks time to unload their positions.”

I also shared an excellent thread on Twitter from a CFA explaining in laymans terms, the difference between currency and money and how Nixon’s actions (taking the USA off the gold standard in 1971 and creating a FIAT currency ) was technically a default on its debt. It’s also a very good summary of Mike Maloneys excellent ” The Hidden Secrets of Money” series that you can find on Youtube. This is a MUST watch for anyone who wants to understand how the financial system works and especially how every single FIAT monetary system in history has failed.

This is obviously even more important to understand for currency traders and investors. I implore you to watch it!

Mike Maloneys Hidden Secrets of Money

Here is a link to my Twitter feed where you can see the thread from Rajat Soni CFA and other important (in my opinion 🙂 posts and thoughts that I share:

https://twitter.com/marcwalton

Below is a very good video from Mike Maloney this week who discussed what’s really going on in the US financial markets and especially the banks. He shared the conclusions from a study last weekend that shows that around 500 US banks have worse balance sheets than SVB bank that went bust the week before!

Conclusion a potential bank crisis is definitely not over

I explained in Tuesdays live session the smoke and mirrors that went on to bale out Credit Suisse Bank and how $17 Billion of bondholders’ investments were written off. I also showed how banks and hedge funds tend to hold a large proportion of their holdings in government bonds as they are usually perceived to be very safe and very liquid. SVB disproved that theory and that is what is currently worrying the FED and other central banks.

Here is Mike’s video (yes he is pitching his new book, which I have ordered a copy of) but he is a very good monetary historian as well as being up to the minute on his assessment of what is really going on in the economy. Another thing to note (always take note of people’s motivations)! he is a gold bullion dealer. He is currently very bullish on gold as am I. Mike, as a bullion dealer is bullish most of the time 🙂 whilst I am not as metals often go to sleep for years on end.

However, at this moment in time, I am 100% in agreement with him. Just like the crypto boom that we made massive profits from in 2020/2021 by catching the cycle at the right time, I think we are on the cusp of a major run up in metals. I have bought gold and silver, most recently gold at $1810 which I shared with you in advance. I am also buying mining stocks. If gold and silver go on a run as I anticipate, then this gives an opportunity in effect to leverage potential gains.

I could of course be wrong and I am not a licensed financial adviser in any jurisdiction.

 

Hedging

In Tuesdays live training session I gave a basic introduction into hedging. One example I showed was hedging my gold and silver positions by shorting using leverage from a forex broker. This is the only time/way I would trade gold. If I have $10,000 in physical gold holdings and anticipate a pullback I don’t want to sell it. Not only will it create a taxable event, I could be wrong. Sell it and watch it shoot up without me. By hedging, I can take a short position. If price does pullback I can take that profit and buy more at a cheaper price. If price shoots up and my fx trade loses I am still in profit because the price of my physical gold has gone up.

I did explain this in Tuesdays live session video which you can find here:

Live: How to hedge against inflation