Investment Conundrums: LeifBridge's Knacke warns of 'distortion of economic realities'

Positive on gold

Extreme stimulus measures from governments and unprecedented monetary policy from central banks have been “lulling investors into a false sense of security”, according to LeifBridge’s Ernst Knacke, who warned in LeifBridge’s most recent monthly review that the global economy is “definitely facing some more severe headwinds” than bullish market moves would suggest.

The head of research said that, in addition to stimulus measures exaggerating economic strength, China-related woes such as regulatory crackdowns and its approach to quashing the Delta variant of coronavirus will hamper the country's prospects for meaningful growth for the rest of the year. "While we do not believe that central banks will tighten any time soon - mainly because they are, almost literally, unable to do so - we think a great deal of the much-vaunted recovery is now priced into most asset prices," he said. "With this in mind, we are perhaps closer to ‘peak sentiment' than ma...