While the prevailing “safe haven” narratives circulate in the market, we read reality through rational numbers and correlations. While everyone is focused on gold, our eyes are on the VIX index; because it is the real conductor of the orchestra. As Tekin Sekmez’s followers know well, market stress separates assets up to a certain threshold, but when that threshold is crossed, everything, absolutely everything, is sold to convert to cash. In the past, we have analyzed the footsteps of this crisis and the signs of rising oil prices step by step here. Now we are in that scenario:
March 2020 (Covid): The dollar index and gold were rising together. The moment the VIX crossed the 50 threshold, gold also gave up and crashed. Because above 50 is the “cash is needed, not profit” zone.
April 2025 (Trump Tariffs): While gold and the dollar index were again moving together, silver was pretending to be a safe haven. However, when the VIX crossed 30, silver’s mask fell, and it slid down from its previous peak. The biggest difference in this crisis is that gold has transferred its geopolitical risk bearing to oil. It is wisest to focus on the VIX independently of the oil price. The moment the VIX settles above 50, the bubble in oil will burst, just like gold and silver in the past. At that point, a “pair trade” opportunity arises where oil goes down and risky assets go up.
Is it the Ghost of 2008, or a Temporary Shock?
The charts clearly highlight the similarity of this outlook for 2026 to the 2008 crisis. Remember; in 2008, US 10-year Treasury yields were at high levels, and oil prices soared to $140, gripping the world. Then the well-known process unfolded: everything collapsed. American stock markets couldn’t reach their previous highs for years. Gold plummeted from $1031 to $680, and silver from $21 to $8. How long we stay above VIX 50 will determine the type of crisis. Initially, I don’t expect the VIX to remain above 50 for 10 weeks like in 2008; I’m postponing that possibility of deep collapse until the fall. Positive news regarding the war could be enough to bring the VIX down. However, if the risks persist and keep oil prices high, the Bank of Japan (BoJ) will continue raising interest rates, and the real major shock will be triggered by the collapse of Carry Trade positions.
Turkish Investor’s Strategic Roadmap
We previously highlighted Money Market Funds (MMFs) for Turkish investors. The main reason for this was our expectation that the Central Bank would not allow an exchange rate shock at the cost of depleting reserves and would minimize the losses arising from the bond weighting within the MMF through bond purchases. Indeed, the process unfolded exactly as we indicated. Now we have another alternative on the TL side: the TFU Fund (İş Portföy CPI-Indexed Debt Instruments Fund). With the likelihood of the war prolonging and inflation expectations being revised upwards, the TFU may provide an advantage in the coming weeks. The characteristic of this fund is that if real interest rates cannot keep pace with rising inflation (i.e., fall), the value of the fund increases. While MMF yielded 3.5% in the last month, TFU’s yield of over 5% despite the generally negative sentiment in bonds is a result of this mechanism. However, the fund’s value may decrease if real interest rates rise (such as due to the end of the war or a sudden interest rate increase). Therefore, this fund has the potential to provide a higher return than PPF during this period of continued inflationary pressure.
This is not investment advice.
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