Gold Skyrocketed 24x the Last Time Inflation Was This High: Alex Krainer

In a recent interview on the YouTube channel Commodity Culture, renowned market analyst Alex Craner shared his expertise on trend following, a popular investment strategy that involves buying assets when their prices rise and selling them when they fall. Craner, a former hedge fund manager with decades of experience, offers valuable insights into the nuances of this approach and its application to various markets, including commodities.

Key Takeaways:

• Trend Following Explained: Craner defines trend following as a strategy of buying assets when their prices rise and selling them when they fall. The challenge lies in predicting future price movements, which Craner acknowledges is impossible.
• Focus on Trends, Not Fundamentals: This strategy emphasizes capitalizing on trends rather than relying on fundamental analysis, which Craner views as unreliable for predicting short-term price movements.
• Discipline and Long-Term Approach: Trend following demands discipline and patience, as trends only emerge in roughly one-third of the time. Investors must be prepared to endure periods of losses between trends.
• The Shadow Banking System's Influence: Craner highlights the significant role of the shadow banking system, encompassing entities like pension funds and hedge funds, in influencing market volatility.

Bullish Outlook on Gold and Silver: Craner suggests that gold and silver might be in a trend, potentially driven by the current inflationary environment.

Cautious on Most Commodities: While bullish on gold and silver, Craner expresses a bearish outlook on most other commodities, including corn, soybeans, and cotton. His algorithmic trading signals currently suggest short positions in these markets.

CFDs for Fine-Tuning Risk: Craner explores using CFDs (contracts for difference) as a way to manage risk more precisely by allowing smaller investments in commodities compared to traditional futures contracts.

Long-Cycle Trend Following for Reliability: Craner emphasizes the reliability of long-cycle trend following strategies, despite their increased volatility. These strategies tend to outperform shorter-cycle ones in the long run.

Socialism vs. Capitalism: A Matter of Distribution: Craner argues that both capitalist and socialist economies involve government intervention. The key difference lies in how the money is distributed - bottom-up in socialist systems and top-down in capitalist ones.

Fascist Tendencies in Top-Down Systems: Craner suggests that top-down distribution of government funds can empower large corporations, potentially leading to a rise in fascism as these corporations exert influence on governments.

Conclusion:

Craner's interview offers valuable insights for investors seeking to navigate the complexities of the market. His emphasis on trend following, coupled with a long-term perspective and risk management strategies, provides a framework for potentially successful investment decisions.