Sharpfokus Brief – Wednesday, July 9, 2025
💡 Could Tariffs Finally Shift Flows from Gold to Stocks?
The problem
Since the year 2000, gold has outperformed even the Nasdaq Composite — and therefore most global stocks.
One major reason?
Massive monetization outside the US, driven by persistent trade surpluses and the resulting build-up of foreign exchange reserves.
When countries run large surpluses, they often accumulate US dollars, which are then recycled into financial assets — or parked as reserves.
This monetization of trade has created steady demand for gold as a reserve asset, especially in Asia and emerging markets.
At the same time, these surpluses have reduced the need to grow domestic demand, meaning slower growth in company cashflows.
Now, that pattern may be changing.
With Trump’s new tariffs, the era of ever-rising global surpluses may be ending.
Countries will likely need to shift from export-led growth to domestic demand.
That’s a big deal — because domestic demand growth is better for cashflow than selling cheap exports.
Less trade surplus =
Less reserve accumulation =
Less monetization =
Less demand for gold
And at the same time:
More local demand =
More real cashflow for listed companies
In short, this shift might finally allow cashflow-rich stocks to outperform gold again.
Let’s see.
⸻
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Get 7 reports per week on Indonesia’s best CFROA companies — high cashflow, low leverage, realistic market expectations.
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For informational purposes only, not investment advice.
💡 Could Tariffs Finally Shift Flows from Gold to Stocks?
The problem
Since the year 2000, gold has outperformed even the Nasdaq Composite — and therefore most global stocks.
One major reason?
Massive monetization outside the US, driven by persistent trade surpluses and the resulting build-up of foreign exchange reserves.
When countries run large surpluses, they often accumulate US dollars, which are then recycled into financial assets — or parked as reserves.
This monetization of trade has created steady demand for gold as a reserve asset, especially in Asia and emerging markets.
At the same time, these surpluses have reduced the need to grow domestic demand, meaning slower growth in company cashflows.
Now, that pattern may be changing.
With Trump’s new tariffs, the era of ever-rising global surpluses may be ending.
Countries will likely need to shift from export-led growth to domestic demand.
That’s a big deal — because domestic demand growth is better for cashflow than selling cheap exports.
Less trade surplus =
Less reserve accumulation =
Less monetization =
Less demand for gold
And at the same time:
More local demand =
More real cashflow for listed companies
In short, this shift might finally allow cashflow-rich stocks to outperform gold again.
Let’s see.
⸻
📊 Upgrade to Sharpfokus Top 100 Research
Get 7 reports per week on Indonesia’s best CFROA companies — high cashflow, low leverage, realistic market expectations.
🆓 Try a free example every Monday in the Brief.
🔗 sharpfokus.com/subscribe
For informational purposes only, not investment advice.