Real assets get their day in the sun

WE LIVE in unusual times. Many of the constants that defined the post-Cold War global economic framework are falling away. In the emerging economic order, central bank independence is under threat, the US dollar’s dominance is fading, and deficits are hitting levels normally associated with times of recession, or even war.

Much of the change is driven by unconventional US policies that are normalising the abnormal. This morphing economic framework is causing financial markets to adjust. Their reaction is expressed via the falling US dollar, rising long-dated government bond yields, rising precious metal prices, and the development of cryptocurrencies as an alternative store of value.

The rise of so-called “fiscal dominance” and the debasement of currencies are defining this emerging financial era.