Hartnett's Big Change and Precious Metals Analysis for 2023
Special: Hartnett's Big Picture Outlook
Meant to be perused and contemplated, Hartnett’s End of Year “Biggest Picture” report just came out.
Our 6th edition of BofA’s Longest Pictures illustrates trends in the economy, interest rates and financial markets in recent decades and centuries.
It is a Summary and 150 charts, in what is by far the most comprehensive bigger picture timeline account of the secular changes over the past centuries They are nicely compartmentalized as well.1. This will also be good for Sunday discussions. For now, here are the Precious Metals and big picture slides broken out. You will also find a fraction of his choice quotes and chronological observations. Enjoy.
Precious Metals & Oil
The Biggest Picture
2020s: an era of higher inflation and rates (periodically interrupted by recession/credit events), US debt and dollar debasement, booms and busts in wide equity trading range, driven by new trends in society (inequality to inclusion), policy (monetary to fiscal), Wall St (leveraging to deleveraging), trade (globalization to isolationism), geopolitics (peace to war), tech (AI), environment (netzero, energy/food security) & demographics (aging).
Excerpt: The long run in words
“Those classes of investments considered ‘best’ change from period to period. The pathetic fallacy is what are thought to be the best are in truth only the most popular—
the most active, the most talked of, the most boosted, and consequently, the highest in price at that time.” Fred Schwed Jr.
“Markets stop panicking when central banks start panicking.” BofA Strategist
“When all the experts and forecasts agree – something else is going to happen.” Bob Farrell
“If there are two rules in investing they are that magnificent portfolios attract inflows, and inflows ultimately destroy magnificent portfolios.” Eric Peters
“Buy on the cannons, sell on the trumpets.” Baron Rothschild
“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” Warren Buffett
Excerpt:The long run in years (QE Era)
2008: Global Financial Crisis…US financial stocks fall 57%
2009: Fed launches Quantitative Easing
2011: US debt downgraded by Standard & Poor; gold price hits record high of $1900/oz
2014: Fed ends QE program; oil begins brutal bear market ($107/bbl to $26/bbl in Feb’16)
2016: Bank of Japan announces negative interest rate policy; TPP (Trans-Pacific Partnership legislation) not ratified by US Congress
2017: US stock volatility hits 50-year low
2018: S&P500 becomes longest bull market of all-time; US/China trade war begin
2019: US economic expansion became the longest since Civil War; US budget deficit hits $1tn
2020: COVID-19 pandemic begins; US unemployment rises 33mn; equity market crashes $30tn; global GDP crashes $9tn; interest rates drop to 5,000-year lows
2021: COVID-19 monetary & fiscal policy stimulus totals $28tn; Bitcoin hits all-time high at $68,992; Apple 1st company to hit $3tn market cap
2022: Russia-Ukraine War; Fed starts most aggressive rate hiking cycle in 40 years; worst loss (17%) in 10-year Treasury since 1788; S&P 500 crashes from 4.8k to 3.5k
2023: India surpasses China population; 2nd US debt downgrade; US Treasury losses for 3rd consecutive year; ChatGPT ignites AI “baby bubble”.
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