Wall Street prediction: Musk may become the new central banker of the world

In a dialogue exploring the collision between traditional finance and future technology, Tom Lee, the co-founder and research director of the US investment firm Fundstrat Global Advisors, known as the "Wall Street wizard," painted a crazy "golden black swan" scenario.

In this scenario, the "disruptor" of the global financial system is not the Federal Reserve, but Elon Musk.

As one of Wall Street's most accurate forecasters and staunchest bulls, Lee advised investors to buy stocks during the pandemic downturn and accurately predicted the major bull market in US stocks in 2023. In a recently aired podcast, Lee said that gold is not only an asset with the "Lindy effect," but in his view, it is also related to a "demographic" story associated with a sense of nostalgia.

In the fields of investment and business, the "Lindy effect" means that established companies with a long history (such as Coca-Cola) tend to be more durable than new companies because their business models or products have withstood the test of time. In business, brands or organizations that conform to the Lindy effect are often more stable and do not need to prove their value frequently.

In addition, Lee also saw the risk of a "black swan" event, that is, Elon Musk, the world's richest man, discovers a new "gold-bearing asteroid" and may become the head of the world's central bank.

Demographics and Gold

Lee believes that the price of gold "is likely related to demographics." He pointed out that Fundstrat has conducted a large amount of demographic research and found that "preferences shift across generations." For example, the sales volume of RVs peaks every 50 years or so. He mentioned that the sales volume of RVs reached a peak during the pandemic and said that the last time the sales were so strong dates back to the 1950s.

He said, "Children won't buy what their parents like, but they will buy what their grandparents like. Gold was indeed an important investment for the baby - boomer generation, while Generation X turned to hedge funds and alternative investments."

Lee said that the scale of the gold market is comparable to that of the stock market, and the data supports his statement. The total "above - ground" valuation of gold is between $29 trillion and $34 trillion. In contrast, the market value of the Big Seven is about $21 trillion.

"By the way," he added, "all the gold in the world could fit into a swimming pool."

Is Musk the 'Black Swan'?

Lee further said that gold is an asset with the "Lindy effect": since people have recognized the value - storing function of gold for many years, it is still accepted as such today. "What could break this situation? That's where Musk comes in."

He further explained, "The underground gold reserves are a million times that of the above - ground reserves, and most of the gold on Earth is unmineable." Lee believes that if the price of gold is too high, it will create perverse incentives.

"For example, the 'Big Seven Tech Giants' will definitely directly enter the gold mining industry, right? Because digging for gold is more valuable than anything else. Why not do it?" he added.

Lee continued to point out that another key risk is that all the gold 'comes from outer space,' meaning that gold originated from meteorite impacts on Earth.

Scientific research shows that the gold on Earth was not entirely produced by the Earth itself, but was brought by meteorite impacts millions of years ago. More precisely, the gold on Earth mainly originated from celestial events in the universe and was brought to the Earth's surface through later meteorite impacts.

In view of this, Lee said that this means that space companies may discover more gold in space.

"SpaceX may carry out a Mars mission and then encounter a gold - rich asteroid. If Elon Musk... owns all the gold, he will become the new central bank." he added.

The Peak of Gold Price

In any case, Lee emphasized that according to Fundstrat's research, the price of gold may have "peaked."

Fundstrat studied the relationship between the price of gold and the market value of stocks over the past 100 years and found that the two usually reach a 150% increase before falling back. The company also noticed that the price of gold dropped by 9% on January 30th. After reviewing historical data, it was found that there were only three previous occasions when the single - day decline of gold exceeded 9%, and all three times marked the peak of the gold price.

"So I don't know, but if we look at history as a guide, it may have already peaked," he said.

This article is from the WeChat official account "Science and Innovation Daily", author: Huang Junzhi. Republished by 36Kr with authorization.