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The Bot Brief
POSTED 04/14/2024
"There is no force on earth more powerful than an idea whose time has come."
- Victor Hugo
Bots in the News:
Perhaps the moon did more than ‘eclipse’ the sun this past week. The luster of the stock market was also dimmed as investors weighed in on the increasingly troublesome inflation picture and rising interest rates. Another potentially worrisome issue involves the dramatic rise in the price of gold. Even the retailer Costco is starting to sell gold bullion bars and 1 oz American Eagle Gold coins. According to the New York Times newspaper, Costco is selling up to $200 million in gold bars and the inventory is selling out quickly. This movement in gold is despite the rising ‘cost of carry’. Typically, when a ‘sterile’ investment (no distributable value) increases it is because the interest rate alternative is low. This time, however, investors are more fearful of a loss of currency value. With the collapse of the Ukrainian hryvnia and the overwhelming level of U.S. debt, investors are seeking currency ‘safe havens’.
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Equally troublesome comes from a CNBC report on wealthy Americans seeking secondary passports. “The wealthy are building these passport portfolio collections of 2nd and even 3rd or 4th citizenships in case they need to flee their home country. Henley and Partners, a law firm that specializes in high net worth citizenships said Americans now outnumber every other nationality when it comes to securing alternative residences or adding citizenship.” Certainly, the gold and passport interest does not reflect confidence in the economy or political situation currently facing investors.
The Bot Brief is a weekly newsletter designed for economists, investment specialists, journalists, and academicians. It receives no remuneration from any companies that may from time to time be featured in the brief and its commentaries, analysis, opinions, and research represent the subjective view of Balcones Investment Research, LLC. Due to the complex and rapidly changing nature of the subject matter, the company makes no assurances as to the absolute accuracy of the material presented.