I like what Jim Grant, publisher of Grant’s Interest Rate Observer, has to say about gold and chaos. BusinessInsider.com reports:
According to Matt Borin at the CFA Institute, Grant told the crowd at a recent conference of the New York Society of Security Analysts that the “case for gold is not as a hedge against monetary disorder, because we have monetary disorder, but rather an investment in monetary disorder.”
Grant noted that the $11.7 trillion in negative-yielding bonds has created an untenable situation in financial markets. This is Grant’s monetary disorder.
“Radical monetary policy begets more radical policy,” Grant said. “It seems to me, at some point, markets or voters will put a stop to this.”
And as policies get more radical — the next expected phase from markets is the introduction of something like helicopter money, or infusions of cash into the economy directly financed by the central bank — the higher the likelihood that an investment in something outside the current financial system will make sense. Like gold.