Voima Weekly #27 - Macro Is Not a Footnote

Gold bars in the vault of the German central bank. Source: ZEIT Online.

Last week I wrote about how systems begin to buy time. This week I am speaking to those who make investment decisions – with their own money or with the money of others. If the foundation of the portfolio is not in order, the responsibility does not lie with the system. It lies with you.

I entered the financial industry in 2008. In 2011 I received my first client-responsible role. Yet for over a decade I have wondered about one thing: how did the domestic – and more broadly Western – asset management field manage to effectively overlook gold’s entire rise throughout the 2000s?

At first it was almost incomprehensible to me that money could be created without limit. Once I grasped that, I bought gold. When I realized that there was no banker sitting at the Bank of Finland or the ECB who would carry responsibility for my purchasing power, I bought more. Not because I wanted to be right, but because I wanted to protect against a risk I could not control myself.

Over time it became clear that this was not a single investment decision but a structural deficiency. Gold was not easily accessible, nor was it discussed seriously. I founded a business because I saw the need – especially among ordinary savers. Large fortunes are usually diversified and protected. The ordinary person’s wealth is not. If the monetary system changes and you do not have an anchor, you are entirely at its mercy.

When central banks expand the money supply, gold rises just like the price of a cup of coffee. This is not an opinion. It is a recurring observation. Historically, currencies do not usually fade quietly; they drift into crisis through debt cycles. When debt levels rise across the economy – in governments, businesses, and households – the central bank must balance: print enough money to cover interest payments without collapsing the currency. That balance cannot last indefinitely. In such an environment, gold functions as a real measure of how far the monetary system has drifted from its productive foundation, and it is acquired to increase sovereignty.

Yet in many institutional portfolios there is no gold at all. Not a small amount – none whatsoever. This is not an accident. The absence of gold does not reflect a view. It reflects macro expertise (or the lack of it).

By macro I do not mean a crystal ball or the headlines of the day. Macro simply refers to the economic environment in which all investments operate: the money supply, debt levels, interest rates, currency purchasing power, and geopolitical stability. If micro is a single company, macro is the weather. You can build the finest boat imaginable, but if the sea level rises, it affects every boat.

Gold should not be an uncomfortable asset class for an asset manager. It is true that it has not required active management, complex structures, or constant narratives. Many asset managers are highly competent in their own sectors – stock picking, fixed income markets, or within specific mandates. But one cannot speak of holistic asset management if the foundation of the portfolio does not account for monetary reality. Macro is not a layer glued on top. It is the floor upon which everything else stands.

For that reason, gold is not an alternative to other investments but their foundation. It should be in the portfolio – and in the current economic, debt, and monetary environment perhaps with a somewhat higher weighting than in “normal times.” This does not prevent participation in equities, private equity, or other higher-yield (and higher-fee) structures. But without a real anchor, everything else rests on the assumption that the monetary system will remain stable. That is an assumption, not a certainty.

Over the years I have had countless discussions with institutional investors. Committees convene, reports are prepared, risks are carefully modeled. But one thing repeats itself: consensus is a safe place. It is easier to be wrong together than right alone. For years there have been discussions about gold. Lunches have been held, events organized, speakers invited – individuals with central bank backgrounds, Fed backgrounds, deep market experience. They have opened their views on monetary policy, debt cycles, and gold’s role as a balancing asset. Yet decisions have repeatedlybeen postponed. Not because the analysis was weak, but because the system rewards conformity.

Departing from consensus is a personal risk. When others do not hold gold, its absence raises no questions. This is how decisions are deferred – not due to lack of knowledge, but due to caution, fear, and unwillingness to take responsibility when others are not yet moving.

At the same time, capital has been directed heavily into long-duration, illiquid, and “fashionable” structures – energy investments, infrastructure, private equity. All of these have their place. But if the foundation is not in order, the upper floors will not hold. Macro should tell us whether this is the time to lock capital away for years or to first ensure that the floor is solid.

The concern is not about individual decisions but about the dynamic. If the macro environment changes but allocation does not, the issue is not lack of information but lack of courage.

Easy money and easy narratives form an attractive combination. It works as long as liquidity is abundant and confidence holds. But debt levels are historically high, monetary policy is increasingly political, and structural reforms in Europe are delayed. This is not an opinion but the environment in which capital is currently managed.

In such an environment, the significance of gold becomes clear. It is not a mystical asset but transferable, pledgeable, and globally recognized wealth that is not tied to one currency or one government. It serves as an anchor when the system itself is in motion.

If an asset manager does not understand this macro environment, he does not understand the full risk landscape. This is not an attack; it is a professional question. When the foundation is uncertain, individual product selection solves nothing.

If you manage your own wealth, the responsibility is yours. If you manage institutional capital, the responsibility is even greater. It is not about comfort but about bearing risk on behalf of others. The message is simple: put the foundation in order. Ensure the portfolio can withstand changes in the monetary environment. Do not build long-duration and illiquid layers without a real anchor in place. When the balance sheet holds, building is safer. When the foundation is weak, no upper layer will save it.

And if your asset manager cannot justify this – if macro becomes a side remark and gold a matter of opinion – change. Not tomorrow after the crisis, but now. Assetmanagement is not a comfort sport or a marketing exercise. Its first task is to protect and grow assets – that is, purchasing power. Everything else comes afterward.

Building is always easier when the balance sheet holds and remains liquid.

Foundation first. Everything else afterward. It is often boring, sometimes uncomfortable, and rarely rewarded. But in life, business, and asset management there are no shortcuts. If the floor does not hold, no upper structure will remain standing.

–Marko Viinikka
Founder, CEO
Voima Gold Oy

Disclaimer: Voima Weeklies are the personal writings of the undersigned. They do not necessarily represent the official view of Voima Gold Oy or any other company, nor do they constitute investment advice or a recommendation to purchase securities.