Capital Flows and Asset Markets

This is a free preview of a paid episode. To hear more, visit www.russell-clark.com Showing my age, I am paraphrasing from Monty Python’s “The Meaning Of Life”. For years after seeing this movie, when ever I tried to get someone to order dessert after a big meal, I would put on a French accent, and say “It’s only wafer thin”. Speaking of wafers, paid subscribers to the Substack and Slice will know...

This is a free preview of a paid episode. To hear more, visit www.russell-clark.com I have preferred gold to bitcoin for awhile. Theoretically, they should be the same - scarce assets that should rise as investors worry about debasement. The debasement trade is easy to understand. The US is forecast to run 7% of GDP deficits for as far as the eye can see. And yet the market is only going to pay yo...

One of the markets theories I was taught when I was young was that when oil prices are up over 50% year on year, the S&P 500 does poorly. Oil is certainly up over 50% year on year. But rather than being a bearish signal, markets seem to think its a bullish signal. I had also learnt to be cautious when gold starts to outperform the S&P500 - a sign that capital no longer felt safe in growth assets....

This is a free preview of a paid episode. To hear more, visit www.russell-clark.com To be perfectly honest with you, I should have lost money this month. If I look at the big macro trades I follow, they all pretty much went against me. The most extreme was GLD/SPX, which finished the month at lows. Big up months for me have been when this spikes, like in April of last year, or January of this year...

I have been engaged in a number of side projects for the last few months. One of them is writing a book about myself. I have written about eight chapters, but I am struggling to finish it off - there is just so much happening in the world today. So I have decided to serialise the book - that way, I am setting a deadline for myself to get my act together. Below is a taste…. OUTSIDER TRADER They wer...

One of the questions I am often asked is surely the US government or the Fed will step in to stop yields rising too much. And usually I answer this question - with yes that true but that is why you need to own gold, as a hedge against exactly that. And that is a nice, simple answer, but could also be wrong. I could see another reason why long dated US yields rise, one that would closely echo the 1...

Yesterday, I gave a presentation to ANU Alumni of UK. It was just a quick presentation on AI, which I am now posting here. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.russell-clark.com/subscribe

I have used the red pill/blue pill analogy before. I like using it because it does capture the idea of do we choose to continue to stay in an artificial world, or do we choose to face reality? I also like it as the original Matrix was filmed in Sydney, and in fact in the lobby of UBS. The lobby that they destroy, was indeed the lobby I walked past everyday. I felt cool by association. It goes with...

This is a free preview of a paid episode. To hear more, visit www.russell-clark.com I have an investor day this week, and one of the questions was whether we actually need hedge funds? Its a good question. When I look at markets now, I think probably yes which is why, early last year, I launched Brumby. That being said I can (easily) see the case for why you don’t need hedge funds. If we are just...

I try not to take absolute positions, but relative positions. In the inflationary world that we live in, I think inflationary assets will do well, UNLESS central banks run tight monetary policy. What that means in practice for me, is that I like Gold (GLD) relative to Treasuries (TLT). GLD/TLT has been good. I have always worked in relative terms - as I always fear political reaction to one side o...

This is a free preview of a paid episode. To hear more, visit www.russell-clark.com As predicted, markets would generally speaking look through the current crisis and spike in oil prices. Equities are long lived, and its hard to believe this crisis will be long lived. Already oil majors are rushing to add capacity elsewhere, and countries are turning to coal and other energy sources. For me, this...

I find that AI defies almost every investment technique I have ever developed. When DeepSeek was released last year, I thought we would see some correction in pricing in Western AI relative to Chinese AI. That is pricing for Nvidia/TSMC chips would fall back towards SMIC levels (SMIC makes chips for DeepSeek). Contrary to my expectations, the pricing differential has continued to widen. I then tho...

If you have not heard of the “Gays of the Hormuz”, there is a viral tiktok where an interviewer ask people if they think its unfair that we only talk about the Straits of Hormuz. What about the Gays of Hormuz he asks people. Its quite funny. I feel like I SHOULD be worried about the Strait of Hormuz, but part of me just cannot. When I usually see trouble in the market, I am happy to dive in and tr...

I have friends who know nothing of my work life. When they find out I have a social media following of a sort, they ask why do people follow you? It is an interesting question. My best guess is that I really have a holistic approach to the world, and I do think everything is connected, even if those connections are not always easy to see. And then I do my best to explain these connections as simpl...

This is a free preview of a paid episode. To hear more, visit www.russell-clark.com Sorry guys - you need to be a paying sub to watch this one. It’s about what I am trying to do, how its going, and whether market moves in March invalidated or validate the thesis.

There are many reasons I like gold - but I am not a gold bug. To me its just an asset choice among many. One thing that definitely disturbs me about gold is that it has become very popular among retail investors and second rate macro analysts. I also find the recent popularity of silver also a big warning sign. Below is a graph of silver. The tops in silver in 1980, 2008 and 2011 were also tops in...

This is a free preview of a paid episode. To hear more, visit www.russell-clark.com March was as tough as January and February was easy. It was a volatile month, and I put a number of trades on intra month. My best guess of performance is we gave up half of what we had made this year. This is disappointing - although still well up for the year. Months like this tend to really tempt you to move awa...

The say the key to happiness is low expectations. I thought my expectations of central bankers were low enough - and yet I still find myself unhappy with them. There have been many reasons for central banks to tighten monetary policy over the years - rampant asset prices (Bernanke would argue it better to cut rates to cause this outcome - moron), surging oil prices, rising wages, collapsing curren...

The founding idea of Iran is conflict with the US. In some ways, it has been surprisingly successful. The Soviet Union only became enemies with the US post World War II - if you mark the beginning of outright hostilities as the beginning of the Korean War in 1950, to the collapse of the Soviet Union to 1991, this was only 41 years. Modern Iran was founded in 1979, and survives today, 47 years late...

Its funny talking about interest rates. Whenever I say I think long bonds are going to 10% - people with mortgages look like I basically said the world is going to end. I will keep this short - as it is a very simple analysis. Essentially, I think we are in a pro-labour era that sees the back end sell off until political change comes. We are at 5% now, I could see an Iran war sell off drive that t...

Most, if not all, of my big thinking is based on watching the markets, and wondering why something you expect to happen does not happen, and what does that mean. In the earlier part of my career, I looked at JGBs, and wondered why they never sold off despite every major macro thinker being bearish on them. I made a career out of working out why JGBs were strong. When JGBs did start to trade bearis...

For the first time in years, the market has presented me with another option to the rising cost of capital trade. As we all now, the War in Iran has seen oil prices rise precipitously. Given the lessons of the 1970s, you would think GLD/TLT would do well. This has not been the case. The long term trend of gold higher versus treasuries remains, just that the reaction to higher energy prices is odd....

First things first - I am not a gold bug. In my career I have been both long and short gold. In fact, if gold is done, gold and silver miners are excellent shorts here, as I can guarantee there is a huge number of investors who will be buying it all the way down. I like gold as I saw wage inflation taking off, something I still continue to see. And I envisioned something like the 1970s, where infl...

Since I first came up with the GLD/TLT trade, its having its first meaningful drawdown. To be fair, it has been on a blistering run. The idea behind GLD/TLT was that we are in a rising cost of capital world, not because things are bad, but conversely because things are good. Governments are focused on demand management, full employment and rising wages. This means “systemic” inflation will be much...

When I first started looking at the GLD/TLT trade, I really liked the long term graph. It suggest as some point a crisis would send gold to the moon, and treasuries into a tail spin. The peak in the late 1970s was around the time of the second oil shock. Foolishly, I had assumed War in Iran, and a spike in oil prices would provide the same time of move. On the contrary, GLD/TLT is going to be down...