Long Gold and Long Stocks

The podcast explores the interplay of fiscal, credit, and monetary policies amidst a backdrop of global reindustrialization driven by AI. Anshul Sehgal, Global Co-Head of Fixed Income Currencies and Commodities at Goldman Sachs, suggests the US economy is shifting from financialization to industrialization, akin to the Detroit auto boom, fueled by an expected trillion-dollar AI capex wave by 2026. This wave, combined with fiscal stimulus, is expected to drive high nominal growth, overshadowing concerns about recession. Despite potential political turmoil from an increasingly K-shaped economy, AI's disinflationary effects and demographic trends could mitigate inflation risks. Sehgal advises a portfolio strategy of long stocks, precious metals, and short duration, favoring US equities and commodities like gold and copper, while remaining cautiously long on the dollar due to its role in AI investment.