➡ The global economy is facing potential disaster due to the breakdown of international correlations. Large hedge funds are being forced to withdraw their global borrowing due to this breakdown. Countries are moving away from the US dollar, not out of panic, but as a protest against US policy decisions. This shift is causing a liquidity problem for these hedge funds, leading to a possible global recession. Domestically, there’s a growing risk of stagflation and a shift from growth stocks to value. This situation is likened to a natural disaster, causing nations to pull their investments back home.

➡ The article discusses the current economic situation, highlighting the weakening of the US dollar and the rise in gold prices. It suggests that due to trade tensions and tariff issues, investors are pulling their money out of the US and investing more in their own currencies and gold. The article also mentions the possibility of a rate cut by the Federal Reserve due to fears of a tariff-induced recession. Lastly, it points out a trend of decoupling in the market, where traditional correlations between different markets are breaking down.

What’s happening in global markets now is not unlike an earthquake. Nations are calling their money back home, leaving the dollar not for cyclical reasons. They’re taking all their money out of the US and bringing it into their own currency. In doing that, they’re catching many major, major hedge funds lopsided with carry trades not unlike the bullion banks being short gold and long, whoever the hell knows it was that they bought. Welcome to the Morning Markets and Metals with Vince Lancy where each morning Vince brings you the financial and precious metals news. Get you ready for your day.

And now here’s Vince. Good morning. I’m Vince Lancy and this is the Gold Fix Market rundown. Plenty to talk about once again today. So let’s get started with the markets. I’ll describe a little bit of what’s happened in the last 24 hours in the markets themselves. The title is Global. Alternatively, global repatriation is a natural disaster response. We’re going to talk about in big tent fashion everything that’s going on. Try and make it clear without dumbing it down too much. The headline would be gold is up 3%. 3%. All right, there you go. We can now say this is rated R.

All right, here we go, the markets. Let’s let you look at that. All right, that’s gold top right, silver top left. Dollar lower left, US 10 year lower right. Tom. 10 year. Yields are up 16 at 4:45 yesterday morning they were lower or bonds were stronger. And during the day yields started to rally as stock stocks started to drop. That’s not good. And a continuation of that behavior today is not good. The $1 or 220 is down 70. Tom, hard to interpret that as good or bad. But you had a dollar that was a little bit weaker unchanged and then it got weaker as the day went on.

This will probably continue. You can interpret it as the Fed will ease or you can interpret it as nobody wants dollars anymore. Domestically, that’s one view. Internationally, that’s another view. Tom. The S&P 500 is 48. 99, down 79. It was up, I don’t know, 150 handles yesterday in the opening. And then it proceeded to drop all day long and it’s, it went negative, closed for the first time, I think in years under 5,000. And now we’re trading 4,900 down another 73 handles. Consistent with. As a foreigner, I don’t want my money in U.S. assets, okay? Sell my bonds, sell my stocks and take my money out of dollars.

This is the earthquake I’m Referring to or the natural disaster. The Vix is 56, up 4%. Actually, muted, but not muted after yesterday. Gold is $3060, up $80, currently 2.7%. That was as high as 3% not too long ago. Silver is participating, up 73 cents, 2 1/2% trading 3055. Copper is participating 411, up 3 cents, up 3/4 of a percent. Now that’s also symptomatic of the world saying we want our money in something other than dollars. Why is copper along for the ride if it’s a global recession? Well, any number of reasons. People are squaring up portfolios.

People are short one commodity and long another. Maybe China is on the verge of debasing, devaluing a little bit relative to the dollar. It’s hard to say. Copper is not the start. Today it’s gold, followed by Silver. WTI 5638. The immediate impulse is recession for oil. People are going to use less oil and everybody’s pulling their money back to their own country. Everybody’s taking their money out of dollars. They’re taking it out of the payment chain. And so that’s because they’re not going to use it, at least internationally. And so commodities like oil drop even more.

Plus you’ve got a lot of people caught long in that market. Natural gas, 337, down 9. Could be for any reason under the sun. Bitcoin 76,000 and change. Turbulence, but not collapse. Interesting. Maybe benefiting from de dollarization. I don’t know. Full disclosure, I bought some bitcoin yesterday because it wasn’t down and stocks were. And I said, okay, well, this is kind of like a hedge for my gold. How’s that? How’s that for a reason? Palladium 907 and change, up 2. Noise Platinum 923, up 4. Noise. Gold, silver 100. The new reality for now. Soybeans, corn and wheat.

Up, up, up 989, up 4. 465, up 2 and 553, up 3¾. Okay, so back to the landing page. Goal repatriation is a natural disaster response. Global repatriation and gold purchases are part of that. We’re part of something bigger now. It’s not about gold anymore, it’s about the globe. Our discussion will be about that. And in the premium, we have a piece by ING discussing the US Dollar being close to another confidence crisis. These are the stories you put out yesterday with all these topics in mind, but they had not come to a head. As they are right now.

At least that’s manifesting in gold. The first one, Deutsche bank raises its price target to 3350. That went out yesterday morning. The second one, Boa says bonds don’t make sense with and we wrote if stagflation that went out this morning. These are all premium posts that if you have a 401k you want to read the second story. Tom, what do I. If you’re asking yourself what do I do with my money? Now you want to read the second story to help you be more informed for future portfolio allocations. Should we buy the dip or just rent the bounce? That’s a phrase that I’m paraphrasing someone else but it was a very appropriate phrase.

And the phrase basically was saying as the market was on the highs yesterday morning, the question I asked myself was Tom, was that the bottom or is this just a hope fueled rally? Oh, the Fed’s going to cut, let’s rally. Well, turns out it was just a hope fueled rally. Doesn’t mean they won’t cut. They just didn’t cut yesterday. That is another explanation of what we’re going to go through today In a little bit more concise terms. Anti Goldilocks, the return of 1970 style stagflation risk is growing. Well that’s it. That’s what that, that’s what that is.

And then we haven’t watched CPI review. So let’s get to the title story. It’s all. That was all the title story. Okay. The US dollar is close to another confidence crisis. The dollar is close to a confidence crisis. Quoting ing the Sell America scenario is becoming tangible again as Treasuries and US equities are under pressure. Remember at the same time that can be a very toxic combination for the dollar. Markets are clearly punishing US assets again after a 104% China tariffs kicked in. Barring any de escalation the dollar has further to fall. Meanwhile, China is allowing the yuan to fall gradually.

Okay, if you’re depending on which radio station you dial in, you’re going to get different flavors of this. So for example, one of the things that Zero Hedge is focusing on, they’re focusing on the yen and the hedge funds basis trade is what they call it. And these are advanced versions of carry trades. People are shorting one thing to take the money and buy another thing while they’ve been shorting the end forever. Right. And taking the money and buying US stocks, that’s part of what’s going on. But in a more Complex version. They’re taking money and shorting Treasuries, buying Treasuries and using a basis swap to hedge the interest rate risk and then taking the money and buying other things with it.

So everything is about what can I sell that won’t go up my ass, that I can take the money and use it to buy something that I think is going to keep going up. All those trades are unwinding now. And that’s the, if I could be so bold, my impression of the zero hedge focus. And it’s, it’s what’s happening right now. And it leads to, as they opine, bailouts of hedge funds similar to the repo crisis, etc. What caused that? What caused that is repatriation. So here’s an indication of some of the things that are happening right now in the global markets.

When things are functioning normally and there’s a crisis in Asia, you’ll see the yen go up, you’ll see gold go up and you’ll see US Treasuries go up. So in a crisis, the yen is a flight to safety, It’s a risk off. And it usually moves in tandem with Treasuries. Treasuries go up and the end goes up two places. Two places you’re safe, putting your money like a war. Now we’re seeing the yen go up and Treasuries go down, which is a direct manifestation of something we’ve been warning it warning about. Stocks are down. I’m a foreign investor, in this case, a Japanese investor, in this case Japan itself.

I’m going to sell my US stocks. Japan has a ton of money invested in the US and everywhere. Japan is a big financer of the world because their yen has been so weak. Anyway, I’m going to sell my U.S. stocks, put them in U.S. bonds. You know what? I’m going to sell my U.S. bonds, put in U.S. dollars. You know what? I’m going to sell my dollars and put it in yen and bring the money home and do something else with it. These are international correlations that are breaking and it spells potential disaster for the global economy.

The hedge funds that are active and do basis trades, as I just alluded to, are essentially borrowing globally for local trades. They’re in a pinch being forced to unwind their borrowing due to these correlation breakdowns we talked about here. Gold and the dollar, golden rates. Everything in the dollar and everything in rates. Whatever you woke up thinking was true is no longer true. And you have to make big decisions. These funds are massive. All right, just to give you a snippet of how to look at what’s going on international versus domestically, internationally. The more I’m paraphrasing Deutsche bank here, the market is accelerating a pivot away from the dollar.

It’s a de dollarization, not in panic, in protest. So countries are saying, we don’t want dollars right now. It’s not a typical crisis marked by a scramble for dollar liquidity to stabilize US asset exposure. Instead, investors are exiting those assets altogether. So instead of saying, I’m going to sell my stocks and leave it in dollars and put it in bonds and then rotate back in, they’re saying, I’m going to get out of the whole thing altogether. I don’t want to be involved in the complex, the US Complex. The shift signals not a temporary funding stress, but a structural loss of confidence in the US financial architecture.

What’s unfolding is the dollarization by intent at the national level, not the fund level. Those guys don’t intend to do it. They’re just panicking right now. Nations are de dollarizing by intent, not necessity. So it is a deliberate response to US policy decisions, especially the overt weaponization of the dollar. Geopolitically, international investors no longer view the dollar as a neutral reserve asset. Okay. They increasingly see it as a contingent liability subject to sanctions, subject to seizure. The dollar has been fully weaponized. To them. It’s kind of like there’s nothing wrong with the dollar as a currency, but as a currency managed by people who we don’t trust.

Well, we want your infrastructure in that regard to be fixed. So that’s internationally. So summary, international policy pushback is creating a liquidity problem for huge hedge funds who have to risking global exit from US dollar, triggering a deflationary global recessionary spiral. Repatriating money. Okay, so that’s a, that’s, that’s, that’s actually an appropriate word, sell, but it is a word salad. Okay, let’s go to domestically. How does this manifest domestically? Well, stagflation risk grows, okay? Out of growth stocks into bonds, out of bonds into value, out of value into gold. It’s happening like that. So there’s, that’s what that back to the seventies thing is about.

That’s what’s happening domestically. So in short, internationally, this is no longer about the dollar’s cyclical strength or weakness. It’s about trust in the infrastructure that supports it. Domestically, I don’t want growth, I want value. It’s that simple. I don’t want growth, I want value. And bonds, which had benefited from QE for years and moved like stocks are now unbenefitting from definancialization and dropping. Like stocks, everyone is pulling their money out. The reason the title is earthquake or natural Disaster. If you’re trying to wrap your head around this as to behaviorally, why are people doing what they’re doing? The, the analogy that I can give, it’s not an analogy, it’s just how it works.

When you’re in an existential crisis, as, as anyone or entity, you tend to pull in the reins, you tend to bring everything home. So the analogy that is easiest to understand is when a nation has a natural disaster of unprecedented proportions, like a reactor melting down in Japan, like an earthquake that decimates a whole country. Mexico City’s earthquake was a big one. What you tend to do is you tend to, in simplest terms, say, we need to take care of our nation. It’s time to take your money out of that investment overseas and pull it back here so we can rebuild, literally rebuild a city, literally take care of our people.

So it’s a repatriation of money in times of crisis, the worst kind of crisis, that must be handled immediately. The rest of the world is likening the tariff scenario as a natural disaster. Okay? Trust is broken, confidence is weak in the objectivity of the system itself. And so we’re going to pull our money back and reassess. This is it. This is an earthquake. It’s an earthquake. And hedge funds like to build skyscrapers and earthquakes tear them down. And that’s what we’re seeing there domestically in stocks. Well, I just told you what’s happening, right? Is it going to continue happening? I don’t know.

But, you know, the, the, the, the takeaway from this is if you’re a tape watcher, if this happens, Tom, you’re worried the dollar is down with treasury yields up and stocks down again. Mrs. Watanabe over there in Japan has money in U.S. stocks because the Japanese economy has sucked for so long and it still sucks, relatively speaking. She’s going, well, I’m not so happy with the US Right now. I’m going to take my money out of US Stocks because the Fed should ease and they’re not easing, right? And then she says, well, I’m going to take my money out of US Stocks and put it in bonds.

And she goes, wait a minute, I’m not so sure. This tariff thing, we’re going to have a recession because we can’t sell stuff to the United States anymore. All right, take your money out of US Bonds and bring it home and do something with it domestically. And that’s it. Another aspect of this tying big picture. These are all big picture things manifesting. Like right now, an example, like a signpost is I guess what you would call it, we’ve talked about here a million times, supply chains. Supply chains are being repatriated. Who controls supply chains? Well, other countries control supply chains for the most part.

What’s the mirror image of a supply chain? A payment chain. Every time a commodity goes out of the ground, someone gets paid, gets refined, someone gets paid. Okay, gets in silver’s instance, becomes a silver paste. Someone gets paid at every point in a supply chain there’s a cash register and that’s the payment chain. And that payment chain has been swift. Everyone gets paid through the same atmosphere network. And now the US has weaponized in their point of view, weaponized this, the other payment chain. It’s kind of like we’re saying, you’re not going to give us access to supply chains, Fine, we’ll rebuild our own.

Our payment chain, our ATM network, sorry, you have to pay us to use it. That’s what’s going on. And that’s a weaponization of our payment chain. It’s not the dollar itself. The dollar is part of how the world functions. The rest of the world is saying, fine, you’re going to charge us to use your atm, fuck your atm, we’ll take our money back and build our own. Hence things like Enbridge, hence things like the unit, hence things like Bancorp, hence alternative ATM systems which may or may not work. And if they do work, they may or may not work fast enough.

The world is pulling out of America and the way to fix it is not so easy for, let’s say Powell, not that he has the power to fix it, but if Powell eases rates to rescue stocks, okay, he makes the dollar weaker. Now normally you’d say, well, that means bonds are a buy because of interest rates are going to drop on the short end. So I’ll buy long end bonds. Right? Lowering Fed funds makes bonds rally. No, not when, not when you’re worried about the return of your capital, not the return on your capital. So when the Fed lowers rates to rescue domestic stocks, all it’s really doing is helping us domestically.

Right? But the rest of the world’s paying higher tariffs, so they’re like lowering rates doesn’t help us, it helps you give us our money back. And it causes inflationary pressures. Right? So if Powell doesn’t rescue stocks or rescues the wrong word, I more like put a bandit on a bullet hole. If Powell doesn’t do something to mitigate the sell off in stocks, well, they’ll keep selling off. Right. And so Trump will start to be more and more enthusiastic in his calls for a rate cut. If you go back to, oh, the Liz Truss event. The Liz Truss event was an example of what’s happening now.

And that is Liz Truss in her mini budget, through various policy decisions said, we’re going to spend more and tax less. Okay. Like in one package. And the world said, we’re not interested in that. Your economy really can’t support more spending and less taxing. So they pull their money out of gilts. They pull their money out of, I don’t even know what the index is called anymore. The, the life I used to call. I haven’t looked at it in a while. But anyway, they pulled their money out of British stocks and then they pulled their money out of the, out of the sterling, right, the pound sterling.

And that was it. And that was like, okay, well then the world’s not going to like this. Now imagine that in the U.S. see, in the U.S. it’s a disaster for the U.S. but, but it’s also a disaster for the world. Everybody uses the dollar. This will, this could really end. I’m just going to throw this out there. This could really end an extremely strong dollar. But not today, not tomorrow anyway. So we have a crisis problem. And that’s why gold’s up, not because of inflation fears. Oh, yeah, you could say, oh, the dollar’s down. You know, that’s why gold is up.

You know what, that’s a good correlation to look at. But when the dollar goes back up, gold may not go down at all. It may go up higher anyway. Market recap. Yesterday, Wall street ended lower as the US Forged ahead with additional tariffs on China, escalating trade tensions. Treasury yields rose on. This is not my writing. Rose on hopes that Trump administration will strike deals with other trading partners over tariffs. Hopes, okay. The dollar weakened against major currencies while gold prices pared gains. Oil prices were down on recession fears. Right. Okay. Canada’s main stock index. And the lower Canada is very natural resource dependent, weighed down by energy and material stocks.

As investors, hopes faded for any imminent U.S. delays or concessions on tariffs ahead of a midnight deadline. Going back to what I was talking about before, a US Company that has free cash flow and is apt to raise its dividends is a value stock. And if it’s undervalued, it’s a buy. I’m referring to gold miners. Now I don’t have any exposure to gold miners other than a smattering here and there, but pure gold miners might be. It might be the 70s for pure gold miners anyway. Data on deck minutes of the Federal Reserve’s March policy meeting will be released today, which is expected to clear some air about the central bank’s rate cut trajectory.

It should right what they say in their tone. We’re going to cut if this, that’s what people be watching. Bets are high for a rate cut in May amid rising fears of a tariff fuel recession. Again, very domestic oriented thing. And then Thursday, FCPI and Friday at ppi. So to recap, what’s happening in global markets now is not unlike an earthquake. Nations are calling their money back home, leaving the dollar not for cyclical reasons. They’re taking all their money out of the US and bringing it into their own currency. In doing that, they’re catching many major, major hedge funds offsides, lopsided with carry trades not unlike the bullion banks being short gold and long, whoever the hell knows it was that they bought.

When you put these things together, it reeks of secular stagflation or the anti Goldilocks. And the anti Goldilocks says that what used to be disinflationary tailwinds pushing markets higher are now inflationary headwinds pushing markets lower. And it manifests with global distrust taking action on that distrust and pulling their money out of all things American. I don’t want dollars. I want my own currency, whether my own currency sucks or not. And I want gold. That’s what’s going on in premium. We have the ING analysis of the dollar being close to another confidence crisis. Very FX oriented. We also have a little bonus there that you’ll see when you tune in.

Let’s look at the, let’s look at the charts for one second. Okay, so you’re looking at a daily move, Tom, that’s huge. There’s historically very, very little permission for the gold market to go up more than 2% a day. Well, here we are up almost 3%. Okay. The day is just starting. You could see gold work its way lower today just like it did yesterday. But the path is clear. Uncertainty means for international people. Every dollar I take out, 50 cents goes into my money, 25 cents goes into my pocket. Right. And 25 cents is going into gold, not Treasuries.

All right, Domestically, the behavior is also clear. Every dollar in stocks that I sell, instead of putting a dollar into bonds, I’m going to put 50 cents in the bonds, 25 cents into a money market. And then I’m going to go, you know what? Screw that. I’m going to take 75 cents out of stocks. Okay, leave 25 cents in the stocks, but 25 in the bonds, 25 into cash, and 25 into gold. And voila, there you have it. On the currency front, we were talking about the yen and its behavior with Treasuries. I don’t have the chart set up here, but the yen is much stronger today.

All right, there’s the end chart we’re looking at. I’ll put up an hourly so you get an idea of the scope of what’s going on this year. The yen going lower. It takes less yen to buy a dollar. So the end is strengthening. As the yen weakens, traditionally, historically, the bond market, the US Bond market. I’m sorry, as the end goes up or gets stronger against the dollar, historically, the U.S. treasury market would also strengthen. Usually it’s a sign of an Asian crisis. The yen strengthening is a sign of an Asian crisis. Look at the yen regionally as the dollar.

There’s a problem. Everyone in Asia puts their money into the yen, and the Chinese probably do as well. Okay, so if Asia is all putting their money into the yen, I’m not saying that’s happening, but they should also be putting some of their money into US Treasuries, right? Nope. Taking the money out of Treasury. So. So if I’m a little nation over there and I’m like, oh, everything’s going bad. My currency, the Vietnam, Vietnamese dong, let’s say, you know, if the dong is weak or low or getting soft, that’s because they’re going, let’s put our money into the Asian dollar, which is the end.

Are we going to put some money into Treasuries? Well, not this time because the US Is tariffing the out of US. Screw that. And that’s what’s happening at one level. Let’s take a look at a couple other markets here. Silver, that’s an hourly. So go, go back to a daily. Silver. Again, economic behaving like stocks. But take note, Take note. Bear with me. Take note. Silver down, right hand side. Stocks down. Silver down. Stocks down. Silver up, stocks down. So we’re looking at a decoupling. Everything’s decoupling. I mean, that’s like the title today. Decoupling. Don’t rely on anything.

I’m Vince. Have a great day. Well, thanks for watching this morning’s Markets and Metals with Vince Lancy. We sure appreciate you tuning in and starting your day with us here. Hope you enjoyed the show and we’ll see you again tomorrow. Please note that this video is not intended as legal, licensed financial trading advice and is to be used for informational purposes only. Please please contact your financial advisor before making any decisions and thanks for watching.
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