Strand: All talk, no action

In this interview with Finansavisen, Eric Strand, fund manager at AuAg Funds, discusses the gold and silver markets following the five-month correction that ran through the spring. 

The market has got US interest rates wrong. Inflation is coming mainly from rising costs rather than from an overheating economy, which is not something rate rises can fix — and with debt at this level, every year spent at high rates adds sharply to what the US pays in interest. Lower long-term rates would ease that, but the long end of the market is set by whoever is willing to buy government bonds, and the foreign central banks that once absorbed much of that supply are buying less. 

That leaves the central bank itself to fill the gap with newly created money (quantitative easing) which brings long-term rates down at the cost of the dollar. Gold is priced in dollars and, unlike a currency, no one can create more of it at will, which is why it draws interest in this situation, at a time when investors hold far less of it than in earlier decades, bonds offer little, and stock market gains rest on a handful of large companies.

**Valuable Insights:**
- Greece did not sell its gold even when the country was effectively bankrupt during the financial crisis — for a state, selling gold is the last move rather than a source of funding, which is why the modest sales by Turkey and Russia matter less than the reserves both spent decades building.

- Central banks have been buying fewer tonnes of gold while spending markedly more dollars on it — a reminder that counting tonnes alone can make their appetite look weaker than it is.

- A car contains only 30–40 grams of silver and cannot be built without them: when a metal is a rounding error in a product's cost but a precondition for making it, a manufacturer will pay almost any price rather than halt production — cocoa showed recently what a genuine physical shortage does to a price.

"Gold price ticking upwards: this is what is driving the gold and silver market now"

AuAg Live #11 with Eric Strand & Christopher Svensson

Investors, followers, and other interested parties will have the opportunity to ask questions directly to Eric during the live stream, which will be hosted on AuAg Funds' YouTube channel: @auagfunds.

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Disclaimer:
This video should not be considered as investment advice. Please remember that the value of your investment may go down as well as up, and past performance is no indication of future performance.

Eric Strand on why the Fed's balance sheet, the money supply and the speed money moves tell you more about policy than its inflation forecasts do.

Börskollen | Strand: All talk, no action

Börskollen | Strand: All talk, no action

Finansavisen Börsmorgon | "Gold price ticking upwards: this is what is driving the gold and silver market now"

AuAg Live #11 with Eric Strand & Christopher Svensson

Börskollen | Strand: All talk, no action

Finansavisen Börsmorgon | "Gold price ticking upwards: this is what is driving the gold and silver market now"

AuAg Live #11 with Eric Strand & Christopher Svensson