The ACID Capitalist Podcast The Real Pulse of Money: Gold, Bonds, and the Hidden Trade
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Oct 22, 2025 Dive into the intriguing world of gold as its recent rise raises questions about its true fundamentals. Explore the mechanics of SOFR futures and discover how call options can yield significant profits if rates dip. Hugh also critiques China's gold reserves in relation to its vast M2 money supply. Plus, learn about the crucial role of base money in the economy and get insights into constructing a balanced portfolio that emphasizes cash, futures, and selective equities. It's a thought-provoking journey through modern money dynamics!
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Chinese M2 And Exchange Rate Distortion
- China's headline M2 converted at market FX overstates dollar-equivalent money stock and masks structural issues.
- Hendry argues the effective functioning M2 and appropriate exchange rate should be materially different than headline figures imply.
Buying Gold Near 2002 Low
- Hugh Hendry recounts buying gold around $275 in 2002 and trading it thereafter.
- He notes that holding from that low would have produced a roughly 15x return, underscoring timing luck.
Use SOFR Calls For Levered Rate Views
- Consider buying long-dated call options on SOFR futures to express a leveraged view that rates will fall.
- A small margin outlay can control large futures exposure and create large upside if rates drop sharply.