Fed’s Powell won’t stop rate hikes until he ‘terrifies’ the wealthiest of investors

MarketWatch/Barbara Kollmeyer/1-9-2023

“All these guys worth $100mm got sucked into a portfolio mix with 75% illiquid investments, 25% liquid. Guys like that spend $3mm-$5mm year and make $2mm after tax. They’re slowly bleeding, but even after last year are not yet scared. Powell won’t finish tightening the tourniquet until he terrifies these guys. They need to feel like their private portfolios won’t come back. They need to see their liquid portfolios lower still. They need to take losses to raise liquidity. It happens every cycle. We’re clearly not there yet.”

USAGOLD note: The observations above are from an unidentified chief investment officer, as reported by One River Asset Management’s Eric Peters to MarketWatch. We thought them worth passing along. Many are worried that 2023 is going to be a repeat of 2022 based on a stubbornly hawkish Fed. Others, like Zoltan Pozsar (Please see above), believe that the Fed will be forced to reintroduce QE this summer – an event that would likely send markets (including gold) on a tear to the upside.