gold is a great asset to hold for the next 5 years

gold is a great asset to hold for the next 5 years

it's a hedge against the credit & refinancing bubble of the US equity markets + government debt

but not only against USD - all FIAT & risk assets including crypto

the financial system infrastructure, including monetary policies of the central banks are correlated

they're heavily exposed to the same set of assets - a lot of which are USD-denominated

this is of course extremely pro-cyclical

in addition to being a store of value, gold is also acting as an investment

it's up ≈40% YTD

this is gold catching up to inflation and accumulated leverage

the financial system is heavily dependent on refinancing

this is true for both, governments and the public sector - especially the financial institutions

≈70% of all new credit is used for refinancing/repaying of existing maturing debt rather than novel financing

leverage and the carry trades eventually unwind

at some point there isn't enough on-demand liquidity and mass defaults, losses and insolvency occur

this is when the cycle tops/bubble pops