Michael Howell, the founder and CEO of Crossborder Capital, a London-based independent research and investment company, has offered a unique perspective on the current state of the global economy. Contrary to the prevailing narrative of monetary tightening, Howell believes that there is a rise in liquidity which will have a positive impact on stocks, gold, and cryptocurrencies.
Michael Howell: An Expert on Rising Global Liquidity and its Market Impact
With over $1 billion assets under management, Michael Howell has established himself as a veteran in the field of global finance. As the Head of Research for Baring Securities and Research Director of Solomon Brothers in the past, Howell has deep knowledge and understanding of international finance and economics. His focus on analyzing global liquidity trends and their impact on markets has made him a prominent figure in the industry. Howell recently appeared on Forward Guidance to shed light on the current macroeconomic landscape, emphasizing the continued rise in global liquidity and its positive effects on liquidity-sensitive assets such as stocks, gold, and cryptocurrencies. It is highly recommended to listen to the whole episode to gain valuable insights.
Howell's analysis is centered around the observation that, contrary to popular belief, the Federal Reserve has been injecting liquidity into markets in a subtle manner. This approach contradicts the prevailing narrative of monetary tightening that has dominated headlines. Despite a reduction in the Fed's balance sheet last year, Howell pointed out that Fed liquidity actually increased by 12 to 15%. This trend is not a temporary phenomenon but part of a longer-term pattern of monetary inflation, as central banks globally engage in what Howell describes as shadow quantitative easing and shadow yield curve control.
One significant factor contributing to the rise in Fed liquidity last year was the draining of the Reverse Repo (RRP) facility and the Bank Term Funding Program (BTFP). Howell anticipates that central bank liquidity will continue to unlock, especially once the RRP is fully drained, and he even suggests the possibility of the BTFP being renewed.
Another aspect that adds complexity to the situation is the U.S. Treasury's strategic decision to shorten the maturity of its debt issuance. This move, as Howell explained, mechanically reduced the private sector's liquidity needs to absorb government paper, particularly benefiting the banking sector in managing its systemic overexposure to duration.
All these factors may indicate a transition from a rebound phase to a calm phase. Howell highlighted that the financial sector and high-beta securities, including cryptocurrencies, tend to perform well in such calm phases.
Regarding cryptocurrencies, Howell mentioned that they could experience particularly positive influences. He believes that cryptocurrency might be the preferred hedge against monetary inflation for the younger generation, which aligns with the increasing interest in digital assets among younger investors. If this holds true, cryptocurrencies could surpass gold as the preferred investment vehicle for younger investors.
What are your thoughts on Howell's argument that a rise in global liquidity will generally benefit liquidity-sensitive assets like stocks, gold, and cryptocurrencies? Feel free to share your opinions in the comments section below.
Frequently Asked Questions
Are gold and Silver IRAs a good idea or a bad idea?
This is a great option if you're looking for an easy way of investing in both silver and gold simultaneously. There are also many other options. We are happy to answer any questions you may have about these types of investments. We're always happy to help!
What is the best way to make money with a gold IRA?
Yes, but not as often as you think. It all depends on how risky you are willing to take. It's possible to retire with $1 million if your retirement age is reached if you are able to put aside $10,000 per year for 20 consecutive years. If you try to put all your eggs into one basket, you will lose everything.
Diversify your investments. Inflation can make gold perform well. You should invest in an asset that increases with inflation. Stocks can do this well as they rise when profits are increased. This is also true with bonds. They pay interest each year. They are great during economic growth.
What happens if there is no inflation? In times of deflation, stocks are more valuable than bonds. Investors should not put all of their savings in one investment such as a stock mutual fund or bond.
Instead, they should combine different types funds. For example, they could invest in both stocks and bonds. They could also invest in cash or bonds.
This gives them exposure to both sides. Inflation and deflation. And they will still see a return over time.
How can I withdraw from an IRA with Precious Metals?
If you have an account with a precious-metal IRA company like Goldco International Inc, you might consider withdrawing your funds. When you sell your metals, the value of those funds will be higher than if it was kept in the account.
Here are the steps to help you withdraw money from your precious-metal IRA.
First, you need to find out if the provider of your precious metal IRA allows withdrawals. Some companies offer this option while others do not.
Second, you should determine if your metals are tax-deferred. Many IRA providers provide this benefit. However, some don't.
Third, make sure to check with your precious metal IRA provider if there are any fees associated with these steps. You may have to pay an additional fee for the withdrawal.
Fourth, make sure you keep track for at least three consecutive years of the precious metal IRA investments after you have sold them. You should therefore wait until January each year to calculate capital losses on your investment portfolio. Fill out Form 8949 and follow the instructions to calculate how much gain you've realized.
Not only must you file Form 8949 but also have to report to the IRS the sale of precious metals. This is a step that ensures that all sales are taxed.
A trusted attorney or accountant should be consulted before you sell your precious metals. They can assist you in following the correct procedures and avoiding costly mistakes.
What are the pros & con's of a golden IRA?
For those who don't have the ability to access traditional banking services but want to diversify their portfolios, a gold IRA can be a great investment option. It allows investors to invest in precious materials such as gold and silver without paying tax on gains until they are withdrawn.
The downside is that early withdrawals will result in ordinary income taxes on earnings. However, creditors will not be able to seize these funds if you default on your loan.
A gold IRA could be the best option for you if your goal is to have gold that you can own without worrying about taxes.
What Is a Precious Metal IRA?
Precious and precious metals are excellent investments for retirement accounts. They have been around since biblical times and continue to hold value today. It is a great way of diversifying your portfolio and protecting against inflation by investing in precious metals like gold, silver, or platinum.
Many countries also permit citizens to store money in foreign currencies. You can buy Canadian gold bars and keep them at home. Then, when you go back to visit family, you can sell those same gold bars for Canadian dollars.
This is a quick and easy way of investing in precious metals. This is especially helpful if you don't live in North America.
How much of your portfolio should be in precious metals?
Investing in physical gold is the best way to protect yourself from inflation. You can invest in precious metals to buy into their future value, and not just the current price. You can expect your investment to increase in value with the rise of metal prices.
Gains will be taxed if you keep your investments for at minimum five years. If you decide to sell your investments after that period, you will be subject to capital gains tax. If you want to learn more about how to buy gold coins, visit our website.
- SEP-IRA”Simplified employee pension” For self-employed people like independent contractors, freelancers, and small-business ownersSame tax rules as traditional IRASEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less4. (sltrib.com)
- The IRS also allows American Eagle coins, even though they do not meet gold's 99.5% purity standard. (forbes.com)
- Silver must be 99.9% pure • (forbes.com)
- Same tax rules as traditional IRA SEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less Before setting up a Silver IRA, understand the fees and IRS restrictions. (sltrib.com)
How to convert your IRA into a Gold IRA
Do you want to change your retirement savings away from a traditional IRA and into a golden IRA? Well, this article will help you do just that. Here are some tips to help you switch.
The process of transferring money out of one type of IRA (traditional) and into another (gold) is called “rolling over.” Rolling over an account offers tax advantages. People may also prefer to invest physical assets, such precious metals.
There are two types of IRAs — Traditional IRAs and Roth IRAs. The difference between the two types is that Traditional IRAs let investors deduct taxes from earnings. Roth IRAs don’t allow this. If you put $5,000 into a Traditional IRA today, after five years you can only withdraw $4,850. If you invested the same amount in a Roth IRA, however, you'd be able to keep every penny.
These are the things you need to know if your goal is to convert from a traditional IRA or a gold IRA.
First, you must decide whether to move your balance into a new bank account or transfer funds from your existing account to the new one. Any earnings over $10,000 will be subject to income tax at the regular rate. However, if your IRA is rolled over, these earnings will not be subjected to income tax until age 59 1/2.
Once you have decided to open a new bank account, Most likely, you will need to present proof of identity such as a Social Security Card, passport, or birth certificate. Once you are done, you will fill out paperwork proving ownership of your IRA. Once you've filled out the forms you'll send them to your bank. They'll verify your identity and give instructions on where to send the checks and wire transfers.
The fun part is here. Now, deposit money into your account and wait for approval from the IRS. After approval, you'll receive a letter stating that funds can be withdrawn.
That's it! Now you can just sit back and enjoy the growth of your money. Keep in mind that if your mind changes about converting your IRA to another type, you can simply close it and transfer any remaining balance to a new IRA.
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