As stewards of capital and investment portfolios, the most important question fund managers face today is whether the 40-year trend of disinflation is ending in 2021? If so, the return of inflation may become a strong market narrative both this year and beyond.
Rampant monetary easing by global central banks to aid the global recovery from Covid-19 is spurring economic activity while debasing fiat currencies. The rising prices of gold and bitcoin are visible indications of this as investors seek to hedge their portfolios against inflation.
Gold is the new zero-coupon bond, a safe-haven asset that doesn’t make interest payments at regular intervals.
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