• 698 days Will The ECB Continue To Hike Rates?
  • 698 days Forbes: Aramco Remains Largest Company In The Middle East
  • 700 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,100 days Could Crypto Overtake Traditional Investment?
  • 1,104 days Americans Still Quitting Jobs At Record Pace
  • 1,106 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,109 days Is The Dollar Too Strong?
  • 1,110 days Big Tech Disappoints Investors on Earnings Calls
  • 1,111 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,112 days China Is Quietly Trying To Distance Itself From Russia
  • 1,113 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,117 days Crypto Investors Won Big In 2021
  • 1,117 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,118 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,120 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,120 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,124 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,124 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,125 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,127 days Are NFTs About To Take Over Gaming?
Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

  1. Home
  2. Markets
  3. Other

A Tale Of Two Asset Classes: Gold Miners Soar, Banks Crash

The following tables illustrate the dilemma of mainstream money management. The vast majority of legitimate financial advisors and portfolio managers are big fans of bank stocks because finance is a crucial, if not dominant, form of economic activity in the modern world. So the big names in the field -- Goldman Sachs, Deutsche Bank, JP Morgan, etc. -- are generally seen as safe places to put client capital.

Gold and silver, in contrast are fringe, primitive, atavistic concepts that are, at best, "insurance" against some kind of 100-year flood that can't be predicted and probably won't happen. But some clients still like such things so what the hell, we'll allocate 1% of the idiots' money to it to shut them up. (1% is literally the proportion of global capital invested in precious metals.)

Unfortunately, that's credit bubble thinking. Banks are dominant forces in an economy only when that economy is creating an unhealthy amount of credit. When the process exhausts itself the banks tank, and terrified capital flows back into "primitive" safe havens. Like today:

Finance Stocks

Precious Metals Miners

 

Back to homepage

Leave a comment

Leave a comment