Was the BOE’s Pivot a Warning of Things to Come?
October 11, 2022
Hosted by Jay Taylor
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Guest Information
Episode Description
Alasdair Macleod, Michael Oliver and Dr. Quinton Hennigh return. On September 28, the Bank of England (BoE) announced it would begin buying the 30-year gilt at a 20-year high yield at above 5% as pensions funds and other institutions were approaching insolvency due to losses on gilt investments. The fear of a liquidity crisis among pension funds caused by rising interest rates prompted the BoE to pivot even though it was expected to raise rates by as much as 1%. Alasdair emailed your host on October 4 stating, “The BoE's action probably was a turning point. Equally it could be claimed that the public discovery that Credit Suisse has issues could have persuaded the Fed that higher interest rates bring forth systemic risks. We may have a clearer idea on 11th when I’m on your show again!” Stock and bond markets rallied hard off of that news but there are no signs of a change of heart at the Fed. In fact, as Adam Taggart opined on this show on Oct. 4th, it is exactly this kind of Pavlovian pivot psychology that Adam Taggart told listeners that Chairman Powell is determined to dismantle from investor thinking. Since the BoE’s action, the Fed and other banks have stood resolutely hawkish, sending U.S. Treasuries' rates higher again while equity prices have cooled. Meantime, the rallies in the price of gold and especially of silver have Michael issuing one of his most bullish declarations in recent memory. Alasdair will be asked for his latest views on the significance of the BoE pivot and Michael will be asked to explain his sudden bullish views on precious metals. Quinton will opine on some spectacular gold assays reported by Lion One Metals.
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Jay Taylor
Jay Taylor has been able to more than double his newsletter’s model portfolio from 2000 to the present even as the S&P 500 was in the process of losing 50% of its value!
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Jay watched his professor’s prophetic words come true when in 1971, President Nixon completely detached the dollar from gold. Not surprising to Jay, the price of gold skyrocketed in the late 1970s as inflation wiped out vast amounts of wealth from average Americans. To protect his own wealth Jay began to invest in gold and gold mining shares and in 1981 he began sharing his success and insights in his newsletter. In 1981 Jay began writing a subscription newsletter that has earned his subscribers countless thousands of dollars over the years.
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