Inflation woes are once again dominating the market this week. David Roche thinks rising inflation is a real risk for markets, and outlined how he thinks investors should play the trend. He said a combination of bitcoin and gold would be the best way to hedge against a possible debasement of the dollar and other sovereign currencies. Experts say now is a good time to invest in gold while it’s seeing gains.

 

CNBC/Ryan Browne
Bitcoin or gold? Top strategist David Roche outlines his play for hedging against inflation

With fears around inflation dominating the market this week, investors are no doubt asking where to park their cash to protect themselves from a potential reduction in the purchasing power of the U.S. dollar.

While gold is often touted as a way to hedge against inflation, history suggests otherwise, with the precious metal actually yielding a negative return for investors during some of the highest recent inflationary periods in the U.S.

More recently, some investors have suggested bitcoin as an alternative store of value for investors, arguing its scarcity makes it a strong candidate for a kind of “digital gold.”

Veteran investment strategist David Roche thinks rising inflation is a real risk for markets, and outlined how he thinks investors should play the trend.

Roche, president and global strategist at Independent Strategy, has previously backed gold as an “alternative currency,” referring to it as a safe bet for investors unable to get much yield from their savings due to ultra-low interest rates.

On Wednesday, Roche said a combination of bitcoin and gold would be the best way to hedge against a possible debasement of the dollar and other sovereign currencies. In terms of weighting, Roche recommended allocating about 2-3% of a portfolio to crypto, and 7% to gold.

“I would own bitcoin and gold in a portfolio as a hedge against the U.S. dollar,” he said during the latest edition of CNBC’s PRO Talks with Tanvir Gill on Wednesday.

Read the full story, here.

 

Kitco News/Jim Wyckoff
Slight price gains for gold, silver in summertime trading

Gold and silver prices are holding mild gains in early morning U.S. trading Wednesday. A weaker U.S. dollar index and higher crude oil prices at mid-week are working in favor of the precious metals bulls. Bullish technical chart postures remain in place for both metals. Still, the buyers of the safe-haven metals are a bit tentative amid little risk aversion in a quieter global marketplace. August gold futures were last up $1.80 at $1,894.90 and July Comex silver was last up $0.099 at $27.83 an ounce.

Global stock markets were mixed and mostly flat in overnight trading. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. The global marketplace is calm at present, amid no major geopolitical flareups in play.

In overnight news, China reported a big jump in price inflation Wednesday, with its producer price index rising 9% in May, year-on-year, after a surge of 6.8% in April. China’s consumer price index was tamer, with a May reading of up 1.3%, year-on-year. Rising inflationary pressures are a bullish element for the metals markets.

Continue reading, here.

 

Fox Business/Staff
Biden’s budget borrows money ‘forever’ and taxes the rich: Mulvaney

Former acting White House chief of staff and former OMB Director Mick Mulvaney joined FOX Business’ “Mornings with Maria” one day after the Senate held a hearing on President Biden’s budget proposal. He said the focus on borrowing “forever” and taxing the rich stood out to him most in the president’s plan.

“Any president’s budget is not really a spending document because the president doesn’t actually spend money — the Congress appropriates or spends the money. So it’s a messaging document. So when you ask me what the priorities are, you sort of have to go beyond the numbers. Certainly, the numbers are instructive — if you’re going to spend a bunch more money in one area and less in another, it sort of speaks to the priorities. But you have to get down into a lot of the policies that are embedded in a budget in order to find out what the priorities are.

So what are those priorities right now? The first one that jumps out is that they are going to borrow money forever. The budget never balances — typical budgets, as does this one, project out 10 years — they never project it ever balancing. So they’re going to borrow money forever.

And they’re going to tax the rich. That’s what it comes down to, even if it has a negative long-term economic impact on the country. And if you look into their projections, it does. So they’re admitting it’s not really a good economic policy, but it’s a political policy to tax the rich more.”

Watch the full interview, here.

 

 

 

 

 

 

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