The CrossBorder Capital Blog

Gold Is Going Up …. And By A Lot   Monetary inflation soon set to return. The US Fed is currently bailing-out part of the US banking system, but it will ultimately have to bail-out the US government. QE is coming back. Gold and crypto look great monetary hedges against this risk. What could further spur a rising gold price is the fact that foreign Central Banks are accumulating gold fast. Do they know something?       See our latest published research, Global View: Gold Is Going Up …. And By A Lot - 29 th May 2023  

Are Equities Cheap…. Or Are They Going Up?  An Alternative Valuation Framework   Traditional investment analysis focuses on aggregate 'valuation' (P/E) and the business cycle to capture earnings (E). It has a dismal track record. Our alternative approach looks to the liquidity cycle (L) and the behavioural factors that determine asset allocation (P/L). This alternative valuation framework focuses on macro-valuation shifts. It asks not whether a market is 'cheap', but whether investors are positioned too 'risk on' or too 'risk off', given their access to liquidity?     See our latest published research, Global View: Are Equities Cheap…. Or Are They Going Up?  An Alternative Valuation Framework - 25 th May 2023  

Waiting and China-Watching   ·            Emerging Market Liquidity dipped slightly at end-April 2022 to an index reading of 54.8 (range 0-100).   ·            Reassuragingly EM Liquidity remains above average, but importantly it is supported both by strong private sector cash flows (67.4) and by still buoyant cross-border capital inflows (55.8).       See our latest published research, China and Emerging Market Latest GLI™ – May 2023  

Weekly Liquidity Update including our broader weekly liquidity measure   ·            Latest weekly data derived from Central Bank balance sheet data show global liquidity expanding at a slower pace (6.4% 3m ann.) but clearly improving (1.8% 12m % chg.). In nominal terms, global liquidity now stands at US$167.9tr – an all-time high.   ·            Latest weekly data for the major Central Banks show aggregate liquidity growth stable at 3.2% (3m ann. %) in local currency terms and ticking lower to 0.2% in US dollar terms (3m ann.). A combination of an expansive Bank of Japan (+19.7%), strong US Federal Reserve liquidity growth (+14.6%) and a less tight ECB (-7.6%) is offsetting the slowdown at the People’s Bank of China (-7.5%) and ongoing Bank of England QT (-13.9%).     See our latest published research, Weekly Global Liquidity Update 19 th May 2023  

Exile on Wall Street?   Global Liquidity drives markets. We are convinced that it bottomed last year and should rise by circa 5-10% in US dollar terms through 2023. It’s true that the index remains low and ‘bad things’, like bank failures, always occur near the trough. But our best guess is that major stock and bond markets will range through this year, and with better odds of a break higher than a further sell-off.     See our latest published research, Global Liquidity Latest – May 2023