Market Observations: Currencies, Gold & Global Economic Trends

Video Chapters & Transcript:

Howdy folks. Welcome to yet another edition of Smarter Money Matters. It really does. With me, your wealth doctor, joined by our super CFPs today, Anna Wunderlich and Lou Vrcelj. Thank you so much for joining us. And uh we just wanted to give you as uh as January of 2026 concludes kind of what our market observations are about what’s going on in the world. a lot of big changes, a lot of things going on now. And let’s talk, I guess, beginning with what’s happening with the dollar. Um, many initial observations from those of us, you know, our citizens are those of us north of the border. Yeah, north of the border. Definitely the Canadian dollar has been uh, you know, kind of shrinking that gap in terms of where the US dollar is compared to the Canadian dollar. So, um, which means the US means the greenback is plummeting compared to the looney. That’s what it means. Yes. And it’s not the only currency that it’s plummeting, you know, compared to. Yeah. So, uh, so basically, you know, the pricing of the dollar, visibly

complicated, u, um, operation. And you know what what’s made the news recently is potential intervention uh by the United States um government to help shore up the value of the yen which has been falling to keep the yen stronger. But that’s not really all there is to it, right? We see this in a lot of different um manifestations uh like uh the cost of gold which is just going through the groove roof right and Lou as you know when the dollar you know goes down what happens to the cost of gold it goes up in dollar terms it may not go up in you know in German marks or you know or other currencies but if the dollar is falling say gold remains constant you know across different currencies if the dollar is going down it takes more dollars to what to buy an ounce of right? Basically becomes more expensive. And I think there’s a lot of reasons. So let’s segue into gold. You guys have been getting a lot of input from clients about the soaring gold and silver markets and we actually have taken a position in precious metals quite some time ago which has done well primarily in sector or macro. Is that right? Uh yes ACP also in our conservative portfolio which is which is active capital preservation. And uh when do you remember when we took those positions Anna? I know that some of them had been in there since early last year and then I believe in the fall we added some gold mining exposure as well. All right. So we got a really really good pop through 2026 you know accelerated by the gold miners in the fall and and recently hit a record I think of 5,000 ounce something like that. Right. So tell me Lou, what are clients asking you about gold? Uh well just basically you know where is it going to go from here? It’s alltime highs right now. Um and and you know it’s it’s anytime you kind of reach those those highs that that territory there’s you know that possibility for a pullback but uh our indicators are still bullish on on gold uh in particular and and so we’re still staying bullish on bullion as it were but uh so you know we’re still staying invested but obviously keeping a close watch on on if that momentum starts to shift and go away to react accordingly. Yeah. Do you have any any further comments on that miss? Yeah, I’ve had a lot of clients asking the past few weeks just about some of the geopolitical concerns and how that is driving um gold up as well. Um and just kind of you know our place in the world with some of our you know various allies and trade partners and a lot of countries some countries are considering you know maybe decreasing their position in treasuries and investing in something like gold another you know precious metals things that that hold value um and so again that’s been a big part of our conversations and actually that’s a very you know salient point uh that you know a lot of you know US treasuries basically US government debt which has forever been viewed as being riskless and probably the most solid thing you can buy and a lot of foreigners and foreign governments have stored their wealth there. Well, that’s changing for a lot of reasons. First of all, the dollar value of the dollar goes down against their currencies. They’re losing money on the bonds. There’s a lot less confidence in United States for a lot of, you know, the the geopolitical changes. you know when the strategic um the geost strategic map you know it seems like the world’s being divided into really three areas of empire right you know Asia Europe maybe with Russia’s designs on it United States in the Americas so there’s a lot lot going on there and that’s a big that’s a big thing you know governments have so much money that if they’re investing in gold that really can skew the markets and drive things up big time um and there’s you know a lot of this is being driven by the so-called the basement trade. And what does that mean? The basement means that the value of the dollar becomes less and less valuable for a lot of reasons. But one concern, the world around is soaring government debt. You know, the US government debt is now at levels that haven’t been seen since World War II. It’s probably going to tip beyond that. Social Security is on its skids. you know, when that goes um becomes insolvent, parts of it do, some bad things are going to happen, including the need for yet more debt. Um, and that’s not limited to the United States that this is an issue that is is many governments around the world are facing and increasingly Europe, you know, and and you’re the the the the fatherland of of you know, of your heritage, you know, Germany, who’s got one of the, you know, the lowest, you know, um, debt levels in the world. What’s going on in Germany now? why, you know, are they facing massive debt? I mean, a lot of these European countries are having to foot more of their military bill. I think that’s a big thing that can possibly cause their debt to go up. Um, as you know, with the new administration saying, “Hey, you know, we’re not going to pay all of NATO, you guys need to pay your fair share.” Yeah. Or we may be we may have to bomb Greenland. If you don’t like it, Denmark, we may bomb you. You know, so gosh knows what’s going to happen. You know, Trump is Trump is is uh he’s played by Zombies. Well, he’s very difficult to read. You know, he’s a lot of head fake, a lot of head fakes with that guy. Who knows what happened? But nonetheless, Europe is facing a threat that has not, you know, been seen since the Second World War with Russia this time and they’re having to gear up regardless of US involvement and participation in NATO. They’re going to have to pay for a lot of their stuff and that’s going to drive them deeply down. Remember, you know, Europe has one of the most extensive social, you know, not networks, safety nets in the world. I mean, that’s a they’ve been welfare states for um for decades, which is really, really expensive to try to get the voters to change. Okay, I’m Frank. You mean not to retire, you know, um before 50 years old? I don’t know. And they go in the streets and they burn garbage, right? You know, it’s so it’s it’s it’s complicated. But getting back to your point Lou about, you know, gold has been going up so much. How can it possibly go up more? And if my finish a thought, but the thing is, you know, as we discussed earlier, you know, when we’re commenting on our precious metals portfolio is just because it’s gone up, say 200%. Doesn’t mean it’s time to go down. The trend is the trend until it’s not. And you want to very try to definitely try to ride that to maximize gain. Sorry to interrupt you. No, 100%. Um so you know I my personal opinion as long as these you know foreign even just for foreign countries foreign for foreign central banks continue to invest and put gold into their portfolio. Um I think it’s going to probably continue again not just that we have you know a lot of you know a lot of Camarda clients and investors around the world you know it’s just uh um it’s really you know complicated complicated situation but at the end of the day you know gold unlike silver which has a lot of industrial applications gold ain’t really good for a lot of stuff except really high performance circuits. It’s rarely used for that you know a small percentage of the the output and jewelry you know but it’s really just a store of value. kind of like crypto. It’s worth what somebody’s willing to pay for. Absolutely. Uh and eventually, you know, if it as if history is any guide, this will turn, you know, and it could be a pretty pretty ugly slide, not just for gold, but US markets, um stock markets, you know. One last thing I’d like to mention on the currency trade, um is when the dollar goes down, what happens, fellas, to the value of non US stocks and other goods? they go up big time, right? In direct proportion, which is why internationals, you know, did relatively well, better than usual last year. Yeah. And that’s even in in the countries whose stock markets themselves are doing well, currency is really such a big factor. So if I buy a share of stock in um in France, right, that say it’s, you know, the Frank and the dollar are parody the say it’s even even money. Now the dollar is worth half as much. that means that that position in French stock is worth twice as much in dollar terms, you know. So, that that’s another thing to to consider. Anything else? This is kind we’ve kind of, you know, kind of just uh um really had a free willing discussion here more than usual, but it’s been interesting. But anything else you like to add before? No, I just want to mention I just want to say as we’re going through our quarterly reviews now with clients in the first quarter, our portfolios have done really really well so far in the year. I know it’s early, but but you know, we’ve done really well in comparison to the S&P NASDAQ. From a compliance standpoint, so we don’t have to run this up the legal poll. Let’s just say that we are in our in our view and my strong view, we’ve done extremely well. Now, not just this year. Last year was another really fantastic year, I think, uh, for many of our portfolios. But for that detail, please get specifically with your personal wealth advisor, Lou, Anna, or Corey that can actually dig into the details for you. But I’m very happy. You happy? Yeah. You happy? Happy here. So, that’s a wrap and uh once again, thank you so much for watching. Smarter money matters. It really does. Next time we’ll be talking about oo private credit alternates, private equity, some of the dangers lurking in these shiny new investment vehicles. See you next time. Bye-bye.