AzValor Internacional: seguimiento y opiniones

 From 2009 to 2019, all of the Fed’s massive balance sheet expansion took place by buying mortgage-back securities, longer-dated Treasuries and various other non-traditional assets. During that period, the Fed did not buy a single Treasury bill. Although the subject is controversial, we believe this radical change in Fed policy explains the collapse in monetary velocity, the lowering of inflation expectations, and the lackluster gold price over the last decade. We believe this is all about to change. Starting in October 2019, the Fed began a new phase of balance sheet expansion by buying Treasury bills for the first time in 13 years. The $160 billion expansion undertaken in the last four months has been accomplished almost exclusively through the purchase of Treasury bills. We believe gold is about to play massive “catchup” with the tremendous amount of monetary growth created by global central banks since the 2008 financial crisis. The reason: the Fed in now injecting “high-powered” money into the banking system for the first time in 13 years. In the last four months, the Fed has finally returned to its traditional methods of conducting monetary policy. The impact on the ongoing bull market in gold is going to be huge.