When all cash chased the bullion, Gold. And More

1. Real rates are expected to fall further as the nominal rates rise with the risk off environment, and inflation is still sticky on the downside. (this is negative for TIPS)

2. Over this week base metals and other industrial commodities have rallied like never seen before, given the narrative of stronger growth ahead.

3. This has been one of the best quarters for bank's trading books, as all the top investment banks saw stalling numbers from their trading books. This can primarily be attributed to the rising volatility trades and directional bets. They plan to withhold these profits to supplement their loses on the banking or lending business.

4. This FOMC meeting, the notion has changed towards inflation targeting, as from the survey of asset managers and economists reflect the changing objective from yield curve control to reflation.

5. Banks, though have typically done well on the trading side, but there have been instances, where they were granted leeway If their trading books couldn't keep up the wild markets. The capital requirements were eased, thus releasing more capital to trade and make up for the losses. These calculations are based on the VaR numbers.

6. There is a divide between the parts of the EU for the stimulus package and the relative pricing of assets. This has led to unequal capital and credit flows.

7. Gold rush can remotely be attributed to the massive stimulus package by Central Banks, that will spur inflation, while base metals are the best hedge for inflation. The major flows come in from ETFs, with billions cashing the ride every week. This rally has engulfed even non gold traders to jump and ride when the tide is high.

8. Though typically when gold price increases, miners have a wonderful time, as finally people are committing to buy at a higher price everyday. This motivates the miners to increase their capital spending on extracting more gold, UNLIKE this time, when the capital spending has gone down with rising gold prices. This indicates the constrained supply of the yellow metal.

9. While the COVID-19 pandemic rages, more than 100 low- and middle-income countries will still have to pay a combined $130 in debt service this year – around half of which is owed to private creditors.

10. The payment mechanisms and tech has completely reshaped the relevance and existence of cash. We have pros and cons of holding and abandoning cash for daily purposes, but it is tough to completely eliminate cash from the system to introduce centrally regulated digital currencies. Though many central banks are considering this possibility, for now we would continue to live in a mixed payment structure, with colossal growth in the direct digital and card transactions.