Good King news / By Kingnews
L & # 39; Review Declining confidence in Fiat’s monetary system and the ability of central banks to lead the economy favor the search for asset classes that are uncorrelated with stocks, bonds and real estate.German version Over the past 12 months, Bitcoin’s dollar value has increased by 60%, while gold’s value has increased by around 25%.Perhaps this development has something to do with the realization that we are finally in an eternal, zero interest regime.Myrtle Zaki
Myret Zaki started in 1997 as a junior analyst in a private bank in Geneva, where she learned the basics of stock market analysis.In 2001, she joined the daily “Le Temps”, where she headed the finance department for nine years.When the financial crisis erupted in 2008, she wrote the investigative book “UBS at the Edge of the Abyss”, for which she received the Swiss Journalist Award.In 2010, she moved to “Bilan”; From 2014 to 2019, Zaki was the editor of the magazine.
Between 2010 and 2016, she wrote three other bestsellers on banking secrecy, the end of dollar reserve status and the development of the shadow banking system.Zaki holds a BA in Political Science from the American University of Cairo and an MBA from the Business School of Lausanne.Today, she is an independent columnist and influential strategies advisor.
Short-term US interest rates remained at 1% or less for a decade after 2008, and after a short interval, as the US Federal Reserve tried to raise interest rates gradually, they now return to zero.Nobody remembers that the historical average of short-term interest rates in the United States is 3.5% – an abnormally high figure for current conditions.And in Europe and Switzerland, negative interest rates are now the norm.This situation favors alternative investments – real alternatives offering real diversification.The real estate whose value is correlated with the interest rate level is no longer an option because its price level in Switzerland is now very high by historical standards.Many institutional investors have moved away from negative Swiss bonds to move to a more cautious asset class, which has resulted in soaring prices and limited upside potential for sales.
Even for private investors, the purchase of real estate is no longer so attractive, even when mortgage rates are low.Mortgage credit is heavily regulated in Switzerland: locked-in capital can not account for more than 10% of market value, homebuyers must prove to their bank that they can afford to pay 5% interest , while the interest expense should not represent a third of the income.exceed.From a macroprudential point of view, this is certainly reasonable, but the middle class of low-income people in Switzerland is now denied much of the de facto purchase of real estate.
They are firm tenants, although rents have fallen much less than interest rates in the mortgage market.Rents are usually not adjusted automatically, but on request.
The benefits of gold In short, low or negative interest rates, as defined by the Swiss National Bank, are not an obvious aid to the purchasing power of the lower middle class.Nor do they permanently help to weaken the franc for exporters.All this shows anemic growth; The State Secretariat for Economic Affairs, Seco, has brought the economic growth forecast of Switzerland for the current year from 1.2% to 0.8%.In this environment, one should look for real diversification and asset classes such as cryptocurrency and gold, which played at best a marginal role in most portfolios until recently.
, appear as interesting alternatives.Both can not be created indefinitely by central banks, they are both decentralized, relatively uncorrelated to the stock markets and can not be charged negative interest rates by central banks.The price of gold is less volatile than that of cryptocurrencies.In 2017, bitcoin was about 15 times more volatile than gold, according to the current report “In Gold we Trust” of the Liechtenstein asset manager, Incrementum.The precious metal trade is also more liquid than the cryptocurrency market.An average of $ 2.5 billion worth of bitcoins is traded daily, which represents only 1% of the gold market, whose daily volume is $ 250 billion.Another advantage of gold is that the precious metal does not depend on a network.
Anyone who must deal quickly with a transaction can do it relatively easily with a piece of gold: no need for electricity, technology or network connection.
Growing suspicion But Bitcoin has a lot to offer.Cryptocurrency applies to younger generations who are not as eager to hold gold as their predecessors.Many savvy investors also cling to the doctrine (defended by central banks) that gold is only a “barbarous relic” and question the intrinsic value of the precious metal.
For young investors, Bitcoin is a digital solution with a payment option.His interest in cryptocurrencies is his own way of expressing a form of mistrust of the future of the fiduciary money system.Digital Natives are not stupid enough to keep part of their assets in Bitcoin.If you do not want to choose between gold and bitcoin, “stablecoins”, cryptocurrencies based on gold, are an interesting option.Although the regulatory risks for these products remain high, stable currencies offer a way to invest in something more digital than gold and more stable than cryptocurrencies, as far as they can include the option of a physical refund of gold.
Stablecoins, however, are slightly more expensive than Exchange Traded Funds (ETFs) on gold and are subject to additional restrictions.These concern the security of private encryption, regulatory uncertainties and limited liquidity.To avoid this, the best option for investors would be to invest some of their assets in classic physical gold and another in a purely crypto-currency wallet.The two classes of assets complement each other and contribute to the diversification of specific risks.
The correlation between gold and bitcoin yields is weak, indicating that the increase in the number of cryptographic currencies does not affect gold demand.Gold and bitcoin will increasingly attract the attention of less and less sure European savers, and the search for alternative investment opportunities will intensify in the coming years.come.Up to now, savers have reluctantly agreed to no longer receive interest on their savings accounts or to lose money on their savings deposits after deducting l & # 39; inflation.
It is probably only a matter of time before they are being charged negative nominal interest on their savings accounts.So they lose even more after deducting inflation.In the true sense of the word, gold and bitcoin are synonymous with mistrust..
