You need to be defensive…
Alfonso Peccatiello on Palisades Gold Radio
Tom welcomes back Alfonso Peccatiello author of the Macro Compass Substack to the show.
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Alf explains his global credit impulse model which measures capital flows during the credit creation cycles of central banks. We are currently in the third part of this cycle where you need to be defensive. He’s currently short some equities and expects a drop in housing prices. Investors should increase their dollar reserves and consider holding gold.
When things improve then credit becomes more available which increases economic activity but simultaneously begins to build risk. Stability therefore inevitably leads to instability due to leverage and margin calls. We’re seeing some of this activity now brewing beneath the surface.