Who owns gold?

 

For stocks there are two classes of investor: Retail and Institutional.  In general if you measure retail bullishness against institutional bullishness you get a pretty good idea of where the markets are headed.  But in the short run there is a balance between these two speculative forces.

For bonds there are three clases of investor: Retail, Institutional and Govenment.  Here the funding needs of Governments competes/conspires with the bank/broker/dealer system that dominates this market.  Retail has to simply read the tea the leaves to try to get on the right side of this trade

For Crypto there are thee classes of investor: Retail, Institutional (like Microstrategies) and criminal.  In crypto the criminal element (including the political classes that use crypto for extra-legal purposes).  dominates the market.  Yet the highly speculative retail flow can cause swings in the price.

For Gold there are three main clases of investor: Retail, Institutional and Cenral Bank.  The Central Banks dominate this market because they have unlimited access to electronic/paper money, since they can print/generate it.  

But the worldwide retail market for gold also can move prices at the margins. 

Worldwide, the retail investor holds about 10 percent of their assets in Gold. 

In the US that number is less than 1/2 of 1 percent.

Even now with the gold price at all time highs and global ineterst,  both global retail and Central Bank buying accelerating year over year, the US investor is competely oblivious to the Gold market.

Who really cares about the reasons for this disconnect?  Surely some of the same reasons US citizens are far more likely to fall for consipiracy theories than any other developed nation (and most third world nations.)   For example the only country on earth more likely to believe climate change is a hoax is Nigeria at 32% vs the US at 31%.  Or the only country whose citizens are more likelly to believe Biden stole the previous election is Russia (at 37% vs US at 33%)

Clearly US citizens are more likley to believe the US is in the middle of a Golden Age because their leaders tell them this is so even though the labor market fell off a cliff three months ago and inflation is raging at record levels.  So who needs gold?

But over time it seems that even the US citizen is more likely to join the rest of the world in understanding that run away Government Debt does lead to either Stagflation or Hyperinflation.

And no country on earth is accumulating debt faster than the US.

So, when the US retail investor finally wakes up, they will provide another fantastic tail wind for gold.

Meanwhile, if your reading this, you're probably one of the few in the US who have already realized this.  

Lucky you.