Bridgewater's Dalio says 'Buy Gold'

Gold advanced to the highest in two months as the spike in tensions between the U.S. and North Korea fanned demand, with hedge fund billionaire Ray Dalio flagging rising risks, including “two confrontational, nationalistic, and militaristic leaders playing chicken with each other.”

In his post -- which was decorated with a photo of a gathering storm -- Dalio recommends investors consider placing 5 percent to 10 percent of their assets in gold as a hedge against political and economic risks. In addition to the North Korean situation, Dalio also wrote that he sees rising odds of Congress failing to increase the U.S. debt ceiling, leading to a technical default.

As Trump and Kim Jong Un trade barbs, Dalio wrote that “the world is watching to see which one will be caught bluffing, or if there will be a hellacious war.” He added: “When it comes to assessing political matters (especially global geopolitics like the North Korea matter), we are very humble. We know that we don’t have a unique insight that we’d choose to bet on.”

What we would find interesting is if Gold fares well  regardless of inflation data. 

Low inflation means no tightening. High inflation should cause a sell off in traditional common sense. But if it doesn't... you have yourself a BTD market. That is what the Fed gets for a decade of mal- investment. 


Analysts surveyed by Bloomberg say core inflation probably rose 0.2 percent in July. Should they be proven correct when the figures are published at 8:30 a.m. this morning, it would end a four-month string of below-forecast readings. Yesterday, Federal Reserve Bank of New York President William Dudley cautioned that “it’s going to take some time” for headline inflation to return to the central bank’s 2 percent target. The lack of pickup in inflation, despite low unemployment, remains a mystery.

Fed speak

Bank of Minneapolis President Neel Kashkari and Federal Reserve Bank Dallas President Fred Kaplan, both voting members of the Federal Open Market Committee, are due to speak later. Kaplan, due at 9:40 a.m. and Kashkari, at 11:30 a.m., are in favor of waiting for inflation to hit the Federal Reserve’s target before hiking rates.



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