In Case of Fire- Gold, Uranium, and More

BOA Looks at How to Hedge Inflation's Resurgence

“There seems to be a lack of slack.”

Background: This year’s second BOA RIC report covers how to position for what the Bank believes are the most likely scenarios in 2024; Specifically a soft landing followed by inflation reignition

Contents:

1. Intro: From Soft Landing to Inflation Reignition

2. Buy Real assets for an inflation rebound

   1. Gold- (GLDM)

   2. Regional Oil- (KSA)

   3. Uranium- (URA)

   4. Metals Mining Shares- (XME)

3. Why (The Fed) Can’t Touch This Inflation

   1. Data says inflation is not dead at all

   2. Government spending

   3. Households have money to spend

   4. Wages are high and not coming down

4. Footnotes, More

1- From Soft Landing to Inflation Reignition

At the top of it, the RIC Outlook expects slower growth and inflation in most of the world next year at first. Central banks will likely respond by cutting rates (at least 4 times according to Goldman) and most economies will thus avoid recession, supporting markets.

This implies soft landings and inflation reignitions in combination as their most likely scenario. Half of the report is concerned with what assets will benefit most from a soft landing. The other half is focused on two things:

1. What will benefit post the expected inflation reignition.

2. What the Fed has no control over inflation-wise

That is our focus here. From the report’s summary

We think that Fed cuts next year could reignite structural inflationary forces. Consider the parts of the economy proving robust, even impervious, to rate hikes: record government deficits; high household savings, rising wages & record home prices; corporates cushioned by private credit and cash.