Mark O’Byrne needs little in the way of introduction.Founder and executive director of international bullion dealer GoldCore, with over 4,000 clients across 40 countries and $200m AUM, Mark is also a regular expert guest across a diverse range of financial media from mainstream – including CNBC, Bloomberg, CNN and BBC – to the subversive, frequently working with fiscal renegade Max Keiser.
As Goldcore’s research director his passion for gold as an investment is backed by careful technical and historical analysis. In short, Mark knows his metals.
GoldCore are experts in the execution and logistics of the highly specialised precious metals market and have been providing precious metal investment solutions for an International client base since 2003. They offer mass affluent, HNW, UHNW and institutional investors including family offices, trade in gold, silver, platinum and palladium bullion in London, Zurich, Singapore, Hong Kong, Dubai and Perth.
Bullion.Directory’s senior analyst and FX specialist Christopher Lemiuex caught up with Mark for the first of our regular Four Quick Questions features.
Question 1
Chris: We have been seeing a breakdown in economic data globally and more noticeably in the US over the last six months. Commodities are heading lower on deflationary pressures and led by oil.
I have been warning readers that 2014 really began to shape up like 2007/8. There has been a divergence of market participant sentiment and market internals, a collapse in commodities on the stronger dollar, and inflation expectations have collapsed.
Do you believe financial markets are on the precipice of another financial crisis, and what roles will gold play in one’s portfolio?
Everybody should own some physical gold as a hedge and a safe haven asset to protect against the significant risks challenging us today which include bail-ins, currency wars, terrorism and war.
Physical gold in your possession or in the safest vaults in the world will protect and grow wealth in the coming years as they have done throughout history.
Question 2
Chris: The greenback is on a monster rally, collecting positive gains for seven straight months while positive so far in February. Perma-bulls love the strong dollar because they seem to think it is indicative of a strong economy.
However, historically, 20 percent gains in the dollar have been the “canary in the coalmine.” Since the late ‘80s, it has happened three times, and each time bought about steep, double-digit losses. The last two times this occurred, the equity markets crashed.
Do you believe there are any positives to a stronger greenback?
U.S. capital markets have also benefitted as the rising dollar has increased the attractiveness of U.S. dollar denominated assets.
Question 3
Chris: Is the only thing that can stop upward movement the degradation of faith in the Federal Reserve?
A geopolitical event which shows how weak the U.S. economy and indeed financial and monetary system is might also be the catalyst for renewed dollar weakness.
Question 4
Chris: Will the Federal Reserve raise rates this year?
Currency debasement continues in the U.S. and with central banks globally. Banks, and indeed markets appear hooked on the cocaine flurries of cheap money and ultra loose monetary policies.
A rise in U.S. interest rates would be bearish for stocks, bonds, property and the already struggling U.S economy. Stocks already appear very overvalued and are ripe for a serious correction.
The U.S. recovery is greatly exaggerated and the health of the globally important “mouth of last resort”, U.S. consumers and the fundamentals of the U.S. economy remain poorly. An economy that has over 55 million or nearly 20% of the population on food stamps is by its nature very weak and very vulnerable.
For many years now the Fed has been ‘jawboning’ markets and threatening to rise interest rates and return to more normal monetary policies. We have consistently warned that it is important to watch what central banks do, rather than what they say – as they frequently conflict.
Indeed, even what they say can conflict and it is often dissembling and some would say designed to confuse and mislead market participants. Monetary double speak is the order of the day.
Copious amounts of monetary tequila have been downed in the global economy and yet the recovery party remains weak at best.
The mother of all monetary hangovers awaits us all and will likely manifest in deflation, stagflation and sharply higher inflation.
This underlines the vital importance of having an allocation to gold coins and bars in a diversified portfolio.
Gold will maintain its purchasing power in the coming years, as it has always done throughout history.
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