Jim Paulsen

Gold is in the early stages of a long-term bull market, driven by loss of faith in fiat currencies, gold's emergence as the world's most sought-after reserve currency, and continued strong demand from central banks and the private sector.

The best way to invest in the gold bull market is early-stage gold mining stocks, specifically NovaGold, which holds 40 million ounces of indicated and measured gold resources against a $4.2 billion market cap, implying only $119 per ounce of gold in the ground—less than 3% of the current gold price—making it an extremely undervalued gold equity.

Paulsen states the economy is at "stall speed" (real GDP ex-trade is weak) and the job market has flatlined. He notes money supply is picking up, the dollar is falling, and the yield curve is steepening. The Fed will be forced to ease aggressively to prevent a recession. Historically, a backdrop of Fed easing, a lower dollar, and a steepening curve triggers a rotation away from crowded "New Era" growth stocks (Tech/AI) into neglected "Old Era" assets (Small Caps, Cyclicals, International). Long exposure to sectors that benefit from liquidity injections and a weaker dollar. If Zandi is right and inflation remains sticky at 3%, the Fed may not be able to ease as quickly as Paulsen expects.

Paulsen states the economy is at "stall speed" (real GDP ex-trade is weak) and the job market has flatlined. He notes money supply is picking up, the dollar is falling, and the yield curve is steepening. The Fed will be forced to ease aggressively to prevent a recession. Historically, a backdrop of Fed easing, a lower dollar, and a steepening curve triggers a rotation away from crowded "New Era" growth stocks (Tech/AI) into neglected "Old Era" assets (Small Caps, Cyclicals, International). Long exposure to sectors that benefit from liquidity injections and a weaker dollar. If Zandi is right and inflation remains sticky at 3%, the Fed may not be able to ease as quickly as Paulsen expects.

Paulsen argues "no jobs is just unacceptable" and notes the average duration of unemployment is nearing half a year. The Federal Reserve has a dual mandate (inflation and employment). With employment stalling, the Fed will be forced to cut interest rates to stimulate the economy, which mechanically drives bond yields down and bond prices up. Long duration assets (Treasuries) to capture price appreciation from falling rates. Sticky inflation (Zandi's point) prevents the Fed from cutting rates.