REFLECTIONS ON GOLD AS AN ASSET CLASS
4 MARCH 2010 BY TPC 44 COMMENTS
Gold is hotter than ever. You can’t turn on the TV these days without seeing a gold commercial. Several well known hedge fund managers have leveraged up positions in gold while John Paulson even went so far as to start his own gold hedge fund. As an asset
class gold has outperformed just about everything over the last 10 year period. It’s been an impressive run. But is it all justified? Bear with me for a bit while I take a long-term macro look at gold as an asset class….
WHY DEFLATION REMAINS THE GREATER RISK
15 JANUARY 2010 BY TPC 22 COMMENTS
A recent piece of research from Casey’s got our engines going on the whole inflation /deflation debate. It’s been quite a while since I revisited the topic so let’s have a look at the evidence. Let me begin by saying that after having been a deflationista for several years I have substantially pared back my deflationist position to a more neutral position. I no longer have skin in the game per my market bets so consider me an innocent bystander. While I still believe there is much de-leveraging to be done we have likely thwarted the deflationary spiral that I feared was developing in late 2008. Nonetheless, inflation remains a minor concern in the United States for several reasons. Let’s take an in-depth look.
1 comment:
No worries - there is no deflation, just some falling prices. The central banks have never deflated the money supply. And like a dog may be seen zo zig-zag in the end it follows its master. So do prices when monesy is debased. This "fear of deflation" is just a ruse by central banks to keep inflating the money supply. Deflation does not keep people from spending – they always spend what's necessary. And money NOT "spent" is then saved which means it is credit to someone who invests it for capital goods etc. thus it is again being spent, only not for consumption. Money never lies completely idle to any extent whether there's inflation, deflation, stability or a solar eclipse. For deflation to seriously happen, not only the current extreme credit expansion by the central banks and states (through "quantitative easing", stimulus packages, monetising and then spending national debt etc.) but also the money that was released into the economy PRIOR to the collapse would have to be "mopped up" again. This is nowhere to be seen nor would it be technically possible (confiscation aside) so we will rather see inflation than deflation. Equally, gold has still not run its course, it is not gold that has risen - the dollar and all the other currencies have fallen.
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