Laurence Fletcher and Henry Sanderson report in the Financial Times about hedge fund efforts to use gold to fight fiat currency inflation. They write: Some of the world’s largest hedge funds are raising their bets on gold, forecasting that central banks’ unprecedented responses to the coronavirus crisis will lead to devaluations of major currencies. Paul Singer’s Elliott Management, Andrew Law’s Caxton Associates and Danny Yong’s Dymon Asia Capital are all bullish on the yellow metal, which has risen about 12 per cent this year. They are wagering that moves to loosen monetary … [Read more...]
Archives for May 2020
On Saturday, You Can Buy a Gun in Massachusetts Again
Coronavirus Infects Stock Market: XLII Massachusetts gun stores will be allowed to open this weekend thanks to U.S. Judge Douglas P. Woodlock issuing a preliminary injunction to prevent the state from enforcing the unlawful order from Gov. Charlie Baker. "We don't surrender our constitutional rights. These plaintiffs have constitutional rights that deserve respect and vindication, and it becomes necessary for a court to do that rather than the executive when the executive declines," said Judge Woodlock. Gov. Charlie Baker's emergency order shuttered FFLs statewide, eliminating "all … [Read more...]
“The Current Debt Will Never Be Repaid, Just Inflated Away”
In the Financial Times, John Plender explains that the debt being taken on to fight coronavirus will never be repaid, just inflated away. He writes: A more fundamental question about the recovery relates to the central banks’ asset-purchasing programmes. William White, former head of the monetary and economic department at the Bank for International Settlements, points out that repeated monetary easing to stimulate demand brings forward private spending in time, with purchases being financed by debt accumulation. As the weight of the debt burden increases, the effectiveness of monetary easing … [Read more...]
New! RAGE Gauge™ I’m Busier than Ever
The numbers ain’t pretty. Unemployment went from a near-record low to high in a matter of weeks; the T-bill rate, the investor’s North Star, is a fallen one (see below); gold is up, and background checks are still high (about double compared to this time last year). Elevated risks are everywhere and yet the Nasdaq trades as if there’s “nothing to see here,” as retail investors run ‘em up like .com days. It’s truly breathtaking. In my conversations with you, you’re telling me it’s because of times like these you’re with us. You also tell me, if you’re not a client, how much … [Read more...]
Do Governors Have the Right to Make and Enforce Laws?
Coronavirus Infects Stock Market: XLI You might want to take a few minutes to contemplate your rights. How can governors go wild without checks and balances? There’s a reason states are governed by three branches, not one governor wielding a big stick. Has there ever been a more important time to consider the balance of power in your state? Andrew Napolitano writes: The current interferences with the exercise of rights protected by the Bill of Rights devolve around travel, assembly, interstate commercial activities and the exercise of religious beliefs. These infringements have all come … [Read more...]
Silver Cheapest to Gold in Three Centuries
Henry Sanderson reports in Financial Times on the historically wide gap in the valuations of the two most common precious metals for investment. He writes: Investors are betting on a rally in silver, after the gap between gold and the industrial metal soared to its widest level in more than three centuries. In March the price of an ounce of gold was 125 times higher than the same amount of silver — a record going back to at least 1687, according to data compiled by Ross Norman, a veteran gold trader. But since then the gap has closed to about 113 times, and analysts say more gains for … [Read more...]
Your Survival Guy’s Tip of the Day: Sell Until You’re Comfortable
Coronavirus Infects Stock Market: Part XL Just when you thought you might get your life back blue state governors continue to go wild. Yesterday, Rhode Island Gov. Gina Raimondo said she will sign an executive order taking effect Friday, directing anyone in an indoor or outdoor “public place” to wear a cloth face covering. This includes walking your dog, by example, on public roads. Hmmmm. How will this be enforced? Will mask wearing do-gooders shame me for being unmasked? Live and let live. There are risks in life the minute you get out of bed. When businesses finally … [Read more...]
Your Retirement Life: Follow the Rules, Lockdown the New Norm
You’re seeing firsthand how the cure is worse than the disease. When governors go wild we all suffer. Take Newport, RI for example. The beaches are closed, but the Cliff Walk is open. The Cliff Walk is narrow. It’s impossible to social distance on a five-foot wide path. Now, there’s a huge sign (like the ones you see on the side of a highway) flashing: “Face masks must be worn.” Who are they protecting? In New Hampshire, the Appalachian Mountain Club is closing its hiking huts for the season. The parking lot to the popular Diana’s Bath trail is closed. The Newport Folk and Jazz festivals … [Read more...]
Are Offices a Thing of the Past?
Working in an office, at least full-time, might be a thing of the past in a post-coronavirus world. Bloomberg's Doug Alexander reports on how many firms are adopting work-from-home or blended workplace options for their employees. The implications for commercial real estate could be significant. He writes: Bank of Montreal anticipates that as much as 80% of its staff -- or about 36,000 employees -- may adopt new flexible arrangements that blend working from home with going into the office even after the Covid-19 pandemic subsides. The virus prompted the bank to make a sweeping reappraisal … [Read more...]
Will Investor Bailouts Lead to Higher Taxes?
The Fed has gotten praise from both sides of the aisle for acting quickly and boldly in recent weeks. Who doesn’t like a bailout when it stops their portfolio value from cascading? Well…cascading if you consider a rise in investment-grade corporate bond yields from 2% to 4.5% during what is likely the greatest and most abrupt halting of economic activity in modern history. For some perspective, we’ve included the chart on the Bloomberg Barclay’s Investment Grade Corporate bond index below. During the pandemic, yields rose a little higher than their year-end 2018 level and they were half of … [Read more...]