Year-end look-backs took center stage for the McAlvany analysts in the closing week of 2022. And what a year it’s been. The mother of all credit bubbles has finally been pierced, and while it has not yet violently imploded, it has undoubtedly begun to deflate with a vengeance. Major war has broken out. Supply chain difficulties and price inflation have settled in for an extended stay. The Fed has begun tightening the money supply. If it’s a year for the record books, most of the records are not ones we like to think about.
In short, 2022 will not be remembered fondly by very many people. It was a challenging year, full stop. But beyond the broad characterizations, there is a lot of detail about what has gone wrong, what’s being done about it, how to protect yourself from the worst of the damage, and related subjects. You’ll find that in this week’s analysis from our team.
Key Takeaways:
- There are many reasons and many purposes for which to own gold
- 2022 was a year in which poor investing disciplines realized their true value
- Though many investments reversed course in 2022, the trends set in motion are far from finished
The McAlvany Weekly Commentary: After the insightful interview last week of Orlando Figes regarding Russia, David and Kevin return to answering listeners’ questions—and they get some good ones. The Q&A covers the consequences of a Fed policy pivot on stocks and bonds as well as inflation, the many reasons that sound financial practice involves owning gold, whether the overall situation in the world going from good to bad is real or just perceived, whether the FTX collapse was a result of the failure of the cryptocurrency itself or its management, and several other topics. As anyone who has heard David interview a subject matter expert on the Commentary knows, you can’t hear or read today a more widely and deeply read or knowledgeably contemplative commentator. Don’t miss the Commentary each week for a horizon-expanding session of thoughtful analysis.
Credit Bubble Bulletin: In his review of the year recently departed, we find that Doug’s thoughts are—as is often the case—best summarized by his own words: “The sad reality is that millions of unsuspecting Americans parted ways with a chunk of their financial security. They didn’t realize they were speculating rather than investing. For too long, our Federal Reserve ensured that disregarding risk became the go-to winning strategy. The undoubting had no idea they were about to be slammed by the double whammy of collapsing Bubbles and rampant consumer price inflation.” Few analysts have command of the wealth of materials Doug has, the ability to communicate it clearly, or the discipline to do so. You won’t find a review of 2022 this insightful anywhere else. Don’t miss it.
Hard Asset Insights: In his missive titled “Unfinished Business from 2022,” Morgan shows clearly that the unwind of the year now past is far from over. To summarize his thesis, he quotes the writers at Elliot Wave, “As memorable as 2022 may be for investors, it is just the appetizer to the main course, which will be served in 2023.” Perhaps most insightful, however, are his comments on the consequences of the markets’ loss of faith in the Fed. The resulting contest of wills could have ominous effects throughout the U.S. and the world in the new year. Be sure to include HAI in your weekly reading for well-researched, well-thought-out, and well-written commentary on the financial state of the Union.
Golden Rule Radio: Tory and Miles spend a few moments clarifying their different approaches to the markets as they start off the week’s program. Miles is a “news that moves the markets” kind of a guy, as he puts it, who also relies on his charting expertise, while Tory focuses on the underlying macro fundamentals. Together, they give a thorough view of the markets’ activity and condition and what the future could hold. This week, that view summarizes the year ending shortly after they recorded and identified assets that are strong and those that are not as strong. Unsurprisingly, the metals did well—particularly in the face of an uber-strong dollar—while equities took it on the chin. For well-rounded analysis, don’t miss GRR each week.
