Inflation, deflation, stagflation. Últimamente, parece que todo lo que se escucha estos días lleva la palabra “flation” al final. O eso, o la printing press, QE, Bernanke, el Dollar, commodities, housing y, por supuesto, gold.
En los medios, uno de los mayores problemas que enfrenta nuestra economy es la inflation. Los governments (tanto en los US como en Canada) sin duda tendrán que subir los interest rates, que no pueden permanecer en estos niveles.
Estamos viendo cómo nuestro purchasing power disminuye sustancialmente. Los gas prices son demasiado altos, los food prices están subiendo astronómicamente, y todo lo demás simplemente cuesta más.
Diablos, fui a cortarme el pelo el otro día y ¿adivina qué vi? Un gran cartel rojo que me decía que los prices habían subido. Si mi hair dresser está sintiendo los effects de la inflation, ¿imagina lo que sienten los demás?
Cuando combinas la amount of money que se está printing con un extended period de record low current interest rates, la situación empieza a dar miedo.
Generalmente, subir los interest rates es el prime combatant de las inflationary pressures. En los United States, los short term interest rates son decididos por la Federal Reserve ( ver Lo que la Fed no quiere que sepas haciendo clic aquí.)
Los interest rates afectan directamente el credit market (loans) porque unos higher interest rates encarecen el borrowing. Al cambiar los interest rates, la Fed tries to achieve maximum employment, stable prices y level growth. A medida que los interest rates drop, el consumer spending increases, y esto a su vez stimulates economic growth.
Contrariamente a la creencia popular, un excessive economic growth puede ser muy detrimental. En un extreme, una economy que está growing too fast puede experience hyperinflation, resulting in major problems.
¿Pero hasta ahora, ha sucedido esto?
Claro, estamos experiencing some minor growth y un double-dip es unlikely (o eso dicen). Pero el fact es que las current inflationary pressures son el result de A LOT de new money que se está created – plain and simple.
Si bien la inflation es un major issue, no es el only factor informing las decisions de la Fed on interest rates. Por example, la Fed might ease interest rates durante una financial crisis para provide liquidity (flexibilidad para get out of investments) a los U.S. financial markets, thus preventing un market meltdown. Esto ha sido el clear goal de nuestra recent economic crisis.
Si bien el meltdown ya ocurrió, la printing of money ha stimulated el stock market enough para bring it back a los highs de 2008, y nearing los highs de 2007.
Pero si bien el stock market ha performed, la economy realmente no se ha bounced back tan strong. La amount of borrowing por parte de los US todavía no es enough para get nuestras economies back a donde estaban just a few years ago. Combina eso con el growth que nuestras economies need to achieve para replace todos los lost jobs, plus la amount of borrowing que se está done at current interest rates, y terminamos con un serious problem.
¿Cómo se relaciona eso con tu portfolio?
El impact de la inflation en tu portfolio depends on the type de securities que tengas. Si inviertes only en stocks, preocuparte por la inflation shouldn’t keep you up at night. Over the long run, los revenue y earnings de una company should increase at the same pace as inflation. Creo que ya estamos seeing that en nuestros markets. A medida que la money supply increases, so have los prices de everything else – including stocks.
La exception a esto es la stagflation.
La combination de una bad economy con un increase in costs es bad para los stocks (que es lo que está happening as we speak.) Las Companies están en la same situation que un normal consumer – cuanto más cash tiene, más disminuye su purchasing power con los increases in inflation.
El main problem con los stocks y la inflation es que los returns de una company tienden a ser overstated. En times de high inflation, una company may look like it’s prospering, when really inflation es la reason behind the growth (especially when inflation wasn’t created by growth). Al analyzing financial statements, it’s also important to remember that inflation can wreak havoc on earnings depending on what technique la company está using to value inventory.
Los fixed-income investors son los hardest hit por la inflation. Supongamos que hace un year invertiste $1,000 en un Treasury bill con un 10% yield. Ahora que estás about to collect los $1,100 owed to you, ¿es real tu $100 (10%) return? ¡Of course not! Assuming inflation fue positive for the year, tu purchasing power ha fallen y, therefore, so has tu real return. Tenemos que take into account el chunk que la inflation ha taken out de tu return. Si la inflation fue del 4%, entonces tu return es really 6%.
Este example highlights la difference entre nominal interest rates y real interest rates. El nominal interest rate es el growth rate de tu money, mientras que el real interest rate es el growth de tu purchasing power. In other words, el real rate of interest es el nominal rate reduced by the rate of inflation. En nuestro example, el nominal rate es del 10% y el real rate es del 6% (10% – 4% = 6%).
Como investor, debes mirar tu real rate of return.
Unfortunately, los investors a menudo solo miran el nominal return y se olvidan por completo de su purchasing power.
La best way de combatir este scenario es invertir en inflation-hedging bets mientras mantienes tu diversity en stocks. Esto significa poner tu money en hard assets como real estate o precious metals como silver y gold mientras añades stock positions ligadas a los mining and resource sectors.
Como se mencionó en el above scenario, si inviertes only en stocks, preocuparte por la inflation shouldn’t keep you up at night ya que los revenue y earnings de una company should increase at the same pace as inflation.
Pero si incluyes los mining and resource based investments en la equation, existe la opportunity de no solo beat inflation, sino también protect yourself contra la stagflation.
Se podría escribir un paper de 1,000 páginas sobre inflation, stagflation o deflation. Pero el point que estoy tratando de hacer es simple. Estamos en unchartered waters donde la inflation es aparente pero el growth no lo es. La Fed está printing money y si bien funcionó en el stock market, aún no ha tenido ningún major affect tanto en housing como en employment.
Las Verdaderas Preocupaciones de los US
La Fed no está worried about inflation. Está worried about deflation. Un look at the housing situation y puedes see las pressures de la deflation en la US economy. Los Housing prices continúan dropping mientras que no amount de QE o record low interest rates puede change that.
Nadie está buying US treasuries, except for the Fed ( ver Justo Debajo de Tu Nariz). Así que, regardless del hint de Bernanke de no QE3, me resulta hard to believe que simplemente will just end. Y si lo does, it won’t be long before it comes back. La Fed has no recourse but to continue quantitative easing para avoid un economic collapse. As I have said before, they’ll just call it something else.
¿Y adivina qué significa eso?
Los Stocks seguirán subiendo. Los Prices seguirán subiendo. Y el Gold seguirá subiendo.
Even after el recent commodities pullback, el gold is once again hovering above $1500. I still think it’s going higher.
Aside from los billionaire investors, pension funds, universities y private individuals buying gold, las world’s biggest and fastest growing national economies están en el process de accumulating mass amounts of gold.
Regardless de lo que leas en los headlines, los true buyers de gold son los biggest and fastest growing countries such as China, India y Russia – not hedge funds y speculative investors.
Hace unas weeks, ya te dije que China will be diversifying sus trillions of dollars de reserves into oil y precious metals ( ver El Fin de la Era de América.) Ya han announced an intention to raise sus national reserves by nearly 850%, o 10,000 tons by the end of the decade. That’s an estimated half a trillion U.S. dollars worth of gold. En los first two months de este year, China ya ha boosted sus national holdings by 200 tons.
As the world’s largest gold producer, China churned out 350.9 tons en 2010, but it wasn’t enough para satisfy el overall total demand de more than 700 tons. As demand continues to outpace supply, we can expect China to import more bullion. But China won’t tell anyone how much it has bought, until it has actually bought it. Why would they bid up prices amongst themselves? As 2011 moves forward, I expect China to shock the world with a lot more purchases in gold. They’re buying on the dips, ¿why aren’t you?
El Mayor Comprador de Gold
Mientras China como country está buying big, los regular Chinese investors también están snapping up gold bars and coins, comprando more than ever before en el first quarter de 2011 y overtaking Indian buyers como los world’s biggest purchasers del metal.
El World Gold Council dijo que el investment demand de China para gold more than doubled a 90.9 metric tons en los first three months del year, outpacing el modest rise de India a 85.6 tons. Eso significa que China now accounts for 25% del world’s gold investment demand, mientras que India accounts for 23%.
Last year, India purchased nearly 750 tons de gold, smashing su previous year’s record by nearly 40%. Russia, not to be outdone, bought up two-thirds de su entire national production. Estamos seeing a major change en el world. Las developing nations, both Russia y India, want to own more gold. China está undoubtedly doing what it can to beat out los US.
Pero por muy powerful e influential que sean estos three developing countries, todavía están under the influence del US dollar, el world’s reserve currency. Eso significa que la mayoría de su international business se realiza using the Greenback…y eso significa que necesitan hedge against a falling Dollar.
Así que, even as massive headlines appear, screaming a fall en commodities y precious metals prices, el gold keeps climbing.
Si aún no te has jumped on the bandwagon, it’s not too late. Sure gold is at all time highs. Pero un smart investor knows to buy in a bull market y sell in a bear market.
Los bulls siguen stampeding. Don’t get run over.
Hasta la próxima semana,
Ivan Lo
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