Palisades Gold Radio: The Only Year in History When Treasuries have Lost More than Stocks


Palisades Gold Radio
Nov 22, 2022

Tom welcomes back Michael Gayed, Portfolio Manager at Toroso Asset Management. Michael is the author and publisher of the Lead-Lag Report.

Michael discusses how insane this year has been and how this is the only year in history where treasuries have lost more money than stocks. The only period it can be compared with is 1931. We’re in very abnormal territory.

People can get overly comfortable if something isn’t happening immediately. We saw that with FTX and Lehman Brothers collapses. The beauty of FinTwit is the ability to see the short-term perspective of investors.

Michael says, “When investment becomes religion, it’s time to lose faith.” This is what happens in markets people get overly confident in markets, and we’re seeing margin calls in crypto. Usually, margin calls aren’t limited to just one asset class.

He explains the terms risk on and risk off. For the bulk of this year, Toroso’s signals have been risk-off and defensive. The melt-up scenario is still very much in play, but we’re in a recession. Melt ups are basically just FOMO which eventually fizzle out.

A split government isn’t a bad thing for markets and the economy. The best thing is to lower fiscal spending to reduce inflationary pressures long term. In many ways, the Fed may be trying to counter seasonality.

The strength in the dollar is usually tied to a good treasury market, but this year is the exception. The persistence of the dollar has been relentless until recently. The bear market will continue to take some time to play out.


We’re setting records for the rate of change in many areas. All the statistics are showing that something is not normal. All investors can do is hope that it ends, and Michael is seeing some reason for optimism.

Gold needs the dollar to underperform, and the market needs to believe that a bear market will persist.

The link between miners and gold price is not that correlated. Miners are dependent on additional factors like energy and input costs to consider.

At some point, we end up in a similar debt to GDP situation with that of Japan. Who knows where we will be in another ten years.


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