RE:RE:News out If you look back at the last truly massive global waste of money, the Second World War, it showed the capacity for sovereign credit is very high. And we are in new territory where years of Kensyian economics has flooded the world with accomatative liquidity to support balance sheet expansion.
Ben Benanke set the tune ... just try and test how far we can go even in a zero or negative rate environment ... we’ll drop money from helicopters if we have too. And it isn’t necessary to be so dramatic - you write cheques and put them in everybody’s mailbox, then claw them back through the tax code from those who really don’t up their consumption or need the cash.
Don’t fight the Fed with all your personal savings. Align with their policy but hedge your position. Leveraged gold-based, silver-based and commodity-based investments would seem to ride along with inflationary-biased fiscal and monetary policies very nicely.
As much as some expect the rapture, zombie apocalypse, the ghost of Hugo Chavez to arise on the White House lawn, the sprawling American industrial-military engines of commerce and their government pawns have decades of elasticity in controlling the world's dominant reserve currency before you can start worrying about Zimbabwe-like loss of control. I’d say the risk of being left on the sidelines from prolonged irrational exhuberance and the mother of all asset bubbles in the stock market is probably greater. Playing from the margins with PM’s and commodities, anticipating that others may want some hedging insurance as well, isn’t a disaster preparedness game, it’s a selective risk-reward choice to a specific sectoral rotation while risk of downside profiles for high momentum stocks - those darn FAANG’s and their cousins, rise to dizzying heights.
Much more destabilizing is possibly the lethal shenanigans being played out between Israel and Iran right now, which is no joke. That unqualified diplomat dimwit Jared looks more like Neville Chamberlain and “peace in our time” day by day. Might be good for gold and for business if you don’t might a lot of blood on your hands and creeping threats of global nuclear annihilation. In which case, all bets are off, you can kiss your rear goodbye.
cg