Talking Points:
I: LOTM on crowd sourcing of opinions by sector and industry leaders.
II: Ray Dalio on owning hard assets to pay back debt while the governments use printing presses to pay back debt.
III: Larry Fink on Crypto, Defense spending, On-shoring / Re-shoring, Medical advances, Robotics and AI.
IV: Mike McGlone, Chief Macro Strategist at Bloomberg shares his views on what lies ahead in 2024.
I: LOTM on Crowd sourcing Leadership Views:
We spend copious amounts of time listening to industry and sector leaders getting their view points on investing, geo-politics and macro views. Today we at more of a cross roads than ever before. Some of the big guns of the investment world have stepped forward, Mike McGlone, Chief Macro Commodity Strategist at Bloomberg. Ray Dalio founder and Chair of the largest hedge fund in the world, and Larry Fink, co-founder, Chairman and CEO of Blackrock, the largest asset management company in the world. Agree with these men or disagree, they are much closer to the top of the food chain than you and me. Sometimes they use this position to influence to enhance their book of investments. In the interviews today, that does not appear to be the case. There are a lot of good ideas and there are some very scary ideas.
I’ll summarize their thoughts as best I can but have also linked you to interviews directly so you can hear from them directly. The videos were released last Friday and today, so very fresh.
Ray Dalio and Mike McGlone are the most cautious of the three. Dalio and McGlone are prepared for a very difficult 2024. Larry Fink recognizes that there could be a kinetic war but is more optimistic than McGlone and Dalio.
II: Ray Dalio on paying back debt through hard assets Vs governments paying back debt through printing presses:
Dailio talks about inflation for higher and for longer. This is the way governments around the world need to go to pay back the high debt levels that are not payable without the act of paying it back with cheaper fiat Currency. Dalio shares his thoughts that repeatable patterns that have played out through generations concerning the rise and fall of global powers. The first step in the decline of a global power is the inability to pay debt with hard money. They then move to printing presses to pay debt with cheaper currency. The second step is internal conflict where two oppose groups take hard stances, uncompromising positions in their respective perspectives. The third phase is the rise of a new power that challenges the old power.
We then have five steps of conflict with the last being a kinetic war. First there is a trade war. Then a technology war. This is followed by a geo-political war of influence. The fourth step is a capital/ financial war. Sanctions and currency war are part of a capital /financial war. Then there is a military war. Dalio believes there is a 50% chance of World War Three.
III: Larry Fink on Crypto, Defense Spending, On-shoring / Re-shoring, Medical Advances, Robotics and AI.
Fink agrees that inflation will be higher for longer as will interest rates. Reasons mentioned are Re-shoring and Near-shoring, the global conflict in Ukraine and Middle East. War consumes commodities especially energy. We all know Re-shoring and near-shoring requires new physical building and new technologies such as robotics and AI. Because of his focus on re-shoring and near-shoring, Fink is more optimistic than Dalio and McGlone. Energy, Robotics, AI and multiple countries are mentioned that benefit from leaving China. Countries mentioned are Japan, Mexico, India, Vietnam, Indonesia and the Philippines. Fink has reversed course from being solidly in favor of ESG and anti-bitcoin to now being more pro-fossil fuel, pro-commodity, pro-emerging markets and pro-hard asset, including bitcoin with its limited supply of 21 million coins.
IV: Mike McGlone, Chief Macro Strategist at Bloomberg. On his macro outlook for 2024.
McGlone is the most specific in his negative outlook. It can be summed up with his comment that the price of gold and the S&P 500 will meet at $3,000 each. McGlone believes the S&P 500 will touch $3,000, now $4,300 and gold now $1916 will touch $3,000.
In summary all three believe inflation is need for government to balance their debt crisis, War and domestic conflict is rising and will continue to rise and all three have expressed a need to have hard asset / Commodity exposure.
There are views that the world will experience deflation. This is spoken about the most by Cathie Wood of ARK. Decide what is right for your situation. LOTM is solidly behind the shift towards commodities, Blockchain, and Bitcoin. While light on ownership of the new technologies mentioned above, we would like to build exposure in new technologies. We’ll likely use ETFs to gain exposure in new technologies prior to selling gold silver or blockchain.
Good luck!
“How Gold Can Save Us from The Biggest Recession Ever!” | Mike McGlone, Friday October 13, 2023 on Soar Financial.
“Ray Dalio and Larry Fink views shared on the Paul Barron Network”, Monday, October, 16, 2023.
#crypto #blockchain #gold #silver #emergingmarkets #oil #commodities
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Written October 16, 2023, by Tom Linzmeier, for Tom’s LOTM Blog at https://lotm.substack.com/.
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