Matthew Lekushoff |


Despite geopolitical volatility, most global markets are slightly higher than two weeks ago. Gold, however, is significantly higher -----   rising five per cent in two weeks and six per cent on the month. As a result, it recently broke through its six-year high.

I often joke that gold is a hedge against the world going crazy. Why? Being one of the oldest stores of value, gold is often viewed as a safe harbour when economic waters get choppy -----  unlike fiat currencies, which can simply print more money if they feel like it.

So what has given rise to gold's resurgence? Global security concerns (U.S./Iran tensions and protests in Hong Kong), trade uncertainty (U.S./China trade war and Brexit), U.S. dollar weakness, potentially low U.S. interest rates, and a potential rise in inflation from those cuts, low unemployment, and higher priced Chinese goods, resulting from U.S. imposed tariffs, to name a few.

The obvious question is, will gold continue to increase? If the litany of issues worsens, that is a reasonable assumption. If they improve or are resolved, gold will likely fall. If they largely remain unchanged, that is trickier to anticipate. It's also worth considering that gold's six-year high has caught investors' attention, which may lead to further speculative demand.

We've owned gold to benefit from uncertain and troubled environments. And we'll likely continue to hold gold a good while longer. But we will also (as always) rebalance our portfolios, which means trimming some gold-based profits to reinvest in less loved asset classes while they await their day in the sun.


All My Puny Sorrows   by Miriam Toews: A beautifully written novel about a family's struggle with mental illness. It's also about hope, friendship and the importance of looking at the bright side of life, especially when everything feels dark.
Why the Next Recession Will Hit Canadians Harder Than Americans   by Bloomberg: Canadians have a high debt-to-income ratio. The fourth quarter of last year saw this ratio hit 176 per cent-----  among the highest in the developed world. On an individual level, we are also spending 14.9 per cent of our incomes servicing personal debt, which is the highest since 2007. When the next recession arrives, this level of debt may cause the Canadian economy to suffer more than the U.S.
This Time is Different   by Howard Marks: In his latest missive, Howard Marks discusses recessions, quantitative easing, national debt, inverted yields and historic patterns-----  all in an attempt to emphasize his point: be very careful when you hear people say, "This time is different." Because it rarely is.
How Libra, Facebook's Cryptocurrency, Would Work for You   by the New York Times: Facebook and 27 partners recently announced their intention to create Libra, a new cryptocurrency, unique in that it will provide a stable value and potentially encourage widespread use.
This could be a big deal. Not only might it enable low cost transactions that are currently cost prohibitive, such as, paying pennies per article behind a paywall, it could also provide a stable platform to transfer money to anyone with a smartphone. If this comes to pass, the developing world will benefit greatly given its limited banking infrastructure. 
I suspect this is just the first of many high profile announcements. It's hard to imagine companies like Amazon and Apple letting Facebook and co. becoming the de facto cryptocurrency without a fight.
Dismiss MMT at Your Peril   by Research Affiliates: Another good article on what I believe is a bad idea-Modern Monetary Theory (MMT). A core tenant of MMT is that deficits aren't harmful for countries that control their own currency, so long as they are used to create jobs and drive economic development. The theory is becoming popular with Democrats who've watched President Trump run huge deficits to provide tax cuts and grow the economy. Historically, however, when countries run large and increasing deficits, it often leads to a debt crisis. Like Russian roulette, it works out fine until it doesn't.
Billionaire Investor: "Gold Has Everything Going For It"   by Frank Holmes: Gold hasn't been this high since 2013 and many investors see reasons for it to go higher. 
Joe Rogan Experience #1309 - Naval Ravikant :   An enlightening two-hour conversation with the brilliant Naval Ravikant. Topics discussed include politics, business, philosophy, artificial intelligence and reading. Ravikant also provided one of the best reasons I've heard on why everyone can and should become rich. Here is a  summary of the podcast   if you don't have time to listen.
Does the News Reflect What We Die From?   by Our World in Data: This article delves into how the media often focuses on our fears, rather than what is most dangerous.


"A fit body, a calm mind, a house full of love. These things cannot be bought - they must be earned."                                                           

"All the benefits in life come from compound interest - money, relationships, habits - anything of importance."   
- Naval Ravikant

  • The flying precision of this owl is one of the most impressive things I've seen in a while!


Matthew Lekushoff

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