Ray Dalio, Paradigm Shifts >>> Buy Gold

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https://www.realvision.com/shows/the-interview/videos/building-the-100-year-portfolio

BUILDING THE 100-YEAR PORTFOLIO

The Interview · Featuring Chris Cole and Danielle DiMartino Booth
Published on: February 20th, 2020 • Duration: 54 minutes

Imagine being furnished with generational wealth under one condition – you must choose only one asset allocation for your portfolio and stick with it for 100 years. Where would you even start? Chris Cole, CIO and founder of Artemis Capital Management, returns to Real Vision to answer that very question. He sits down with Danielle DiMartino Booth of Quill Intelligence to discuss the optimal portfolio construction for the long run, regardless of market condition. With uncertainty everywhere despite all-highs in the market, Cole discusses how to navigate Charlie Munger’s "death of the efficient frontier." He explains the allegory of the Hawk and Serpent and breaks down the construction of his 100-year portfolio. Cole and Booth provide viewers with the tools to traverse the "incremental death of alpha," and markets that are increasingly subject to the amplified volatility of increasingly passive investments. This piece is a much-watch for the pension fund or endowment that has no long-volatility exposure in their portfolio. Filmed on February 7, 2020 in Austin, Texas. To find Chris's report:

http:// https://docsend.com/view/taygkbn

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Stocks will keep selling off unless the Fed buys unlimited debt

 

All-Star Luke Gromen and Erik discuss:

• The world is massively short USD and the only way out of this crisis is for the Fed to buy trillions of dollars of debt. Otherwise asset markets will crash.
• How much is enough? Luke says in theory if the economy shuts down completely, the Fed would have to buy “all” the outstanding debt. That’s $47tn!
• How is Luke positioned for what’s on the horizon?

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https://mcalvanyweeklycommentary.com/wp-content/uploads/ica2020-0325.mp3

 

• Gold mines & refineries send workers home for safety – Where will the new gold come from?
• Bonds are telling us that the system is cracking apart

https://goldswitzerland.com/swiss-gold-refiners-cease-production-end-of-paper-market/

 

SWISS GOLD REFINERS CEASE PRODUCTION – END OF PAPER MARKET

The Swiss Canton of Ticino, in the Italian part of Switzerland, has just ordered the gold refiners based there to close, initially to March 29th but this is expected to be extended. Three of the world’s largest refiners – Argor, Valcambi and PAMP are based in Ticino. We are likely to see major pressure on the gold and silver paper market. More later in this article.

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https://mcdn.podbean.com/mf/download/m9w6ph/MacroVoices-2020-03-26-Simon-White.mp3

• This week’s unlimited QE by the FED and its implications
• Comparison of exogenous shocks vs. recession
• Are stocks and bonds both starting to sell off?
• Are treasuries moving up due to the FED buying up bonds?
• U.S. government’s reaction COVID-19 crisis and how will it impact asset markets

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https://old.reddit.com/r/IAmA/comments/fwpt19/im_ray_dalio_founder_of_bridgewater_associates/?sort=top

 

RayTDalio

I'm glad you asked so that I can clarify. Back then, and still now, I believe that central banks will print a lot of money and keep cash interest rates at such low levels that they will have negative real returns and negative returns relative to assets that behave well in times of reflation. When the virus hit and it had its negative impact on earnings and balance sheets, asset values plummeted which made cash look comparatively attractive. However, what did the central banks do? They created a ton more cash to buy debt and push interest rates lower which is having the effect of pushing those assets that will be better suited for the new environment up. When you think about what assets are safe to own, and you think of cash, please remember that while it doesn't move around in value as much as other assets, there is a costly negative return to it in relation to goods and services and other financial assets that amounts to about a couple of percent a year, which adds up. So I still think that cash is trash relative to other alternatives, particularly those that will retain their value or increase their value during reflationary periods (e.g., some gold and some stocks).

 

 

Hyperinflation comes from investors who are holding money and credit assets (e.g. bonds) wanting to sell those and move their money to other assets either in the same country or in other countries. As they do this selling, the central bank is put into the position of having to choose between having interest rates go up (which is undesirable because it weakens the economy) or printing money and buying those financial assets (which can devalue money and debt). When they need to do this a lot, it causes a monetary inflation which becomes a hyperinflation.

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Apr.15 -- Ray Dalio, the billionaire founder of investment management firm Bridgewater Associates, talks with Bloomberg's Erik Schatzker on the "Bloomberg Invest Talks" webcast about the long-term economic implications of the coronavirus crisis and what can be expected moving forward.

 

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https://www.macrovoices.com/832-macrovoices-215-chris-cole-dragon-portfolio-revisited-in-the-eye-of-the-storm

 

https://mcdn.podbean.com/mf/download/kvuh4x/MacroVoices-2020-04-16-Chris-Cole.mp3

 

Erik Townsend and Patrick Ceresna welcome Chris Cole to MacroVoices. Erik and Chris discuss:

• Recap: What is Dragon portfolio?
• How has dragon portfolio performed amidst the COVID-19 crisis
• Consequences of government monetary intervention
• Long-vol strategy: what worked and what didn’t?
• What implications could secular inflation bring to dragon portfolio?
• Commodity trend: what does it mean? 

 

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https://www.linkedin.com/pulse/money-credit-debt-ray-dalio/?published=t

 

When societies first invented money they used all sorts of things, like grain and beads. But mostly they used things that had intrinsic value, like gold, silver, and copper. Let’s call that “hard money.” 

Gold and silver (and sometimes copper and other metals like nickel) were the preferred forms of money because 1) they had intrinsic value and 2) they could easily be shaped and sized to be to portable so they could easily be exchanged. Having intrinsic value (i.e., being useful in and of themselves) was important because no trust—or credit—was required to carry out an exchange with them. Any transaction could be settled on the spot, even if the buyer and seller were strangers or enemies. There is an old saying that “gold is the only financial asset that isn’t someone else’s liability.” That is because it has widely accepted intrinsic value, unlike debt assets or other assets that require an enforceable contract or a law to ensure the other side will deliver on its promise to deliver whatever it promised to deliver (which when it’s just “paper” currency that can easily be printed isn’t much of a promise).  On the other hand, if during such a period of lack of trust and enforceability one receives gold coins from a buyer, that doesn’t have a credit component to it—i.e., you could melt them down and still receive almost the same amount of value because of its intrinsic value—so the transaction can happen without the same sort of risks and lingering promises that need to be kept. When countries were at war and there was not trust in the intentions or abilities to pay, they could still pay in gold. So gold (and to a lesser extent silver) could be used as both a safe medium of exchange and a safe storehold of wealth.  

 

 

The coronavirus trigged economic and market downturns around the world, which created holes in incomes and balance sheets, especially for indebted entities that had incomes that suffered from the downturn. Classically, central governments and central banks had to create money and credit to get it to those entities they wanted to save that financially wouldn’t have survived without that money and credit.  So, on April 9, 2020 the US central government (the president and Congress) and the US central bank (the Fed) announced a massive money and credit creation program that included all the classic MP3 techniques, including helicopter money (direct payments from the government to citizens). It was essentially the same announcement that Roosevelt made on March 5, 1933.  While the virus triggered this particular financial and economic downturn, something else would have eventually triggered it, and regardless of what did, the dynamic would have been basically the same because only MP3 would have worked to reverse the downturn. The European Central Bank, the Bank of Japan, and—to a lesser extent—the People’s Bank of China made similar moves, though what matters most is what the Federal Reserve did because it is the creator of dollars, which are still the world’s dominant money and credit.  

The US dollar now accounts for about 55% of the world’s international transactions, savings, and borrowing.  The Eurozone’s euro accounts for about 25%.  The Japanese yen accounts for less than 10%.  The Chinese renminbi accounts for about 2%.  Most other currencies are not used internationally as mediums of exchange or storeholds of wealth, though they are used within countries. Those other currencies are ones that even the smart people in those countries, and virtually everyone outside those countries, won’t hold as storeholds of wealth.  In contrast, the reserve currencies I mentioned are the currencies that most people around the world like to save, borrow, and transact, roughly in proportion to the percentages I just mentioned. 

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Iran stock index breaks through 1 million mark

https://www.arabnews.com/node/1672126/business-economy

 

liquidity can usurp reality. Here's yet more proof with Iranian TEDPIX +165% this year!

Gold @ 10k?

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Money printing has been growing at 8.31% also Cash has been devalued at same rate. If you look what happen after 1929 then money printing is going to go up at even faster rate. which means Cash is going to be TRASH.

 

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https://www.realvision.com/shows/the-interview/videos/the-charts-of-truth?source_collection=0d3a69f8f4d142478bc0cc033bb359fc

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https://www.realvision.com/shows/daily-briefing/videos/daily-briefing-may-22-2020

 

 

 

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https://goldsilver.com/blog/why-is-silver-stagnant-and-when-will-it-start-moving/

 

Silver at the Onset of Crisis

We’ve fielded a lot of questions on why silver isn’t rising right now, in the midst of the biggest crisis in modern times. And at a time when gold is rising.

But actually, the lag in the silver price is historically normal behavior when these types of crises first strike…

The two biggest effects of the pandemic have been a stock market crash and a hit to economic activity. How has silver performed during these events in the past?

First, here’s how both gold and silver prices have performed during the eight biggest stock market crashes before this one. Green means it was a positive return, yellow means it fell but less than the S&P 500, and red means it fell more than stocks.

You can see that gold rose in every instance but two, with one of those declines less than the S&P 500. And we should point out that the 1980-1982 period was right after gold’s biggest bull market in recorded history, so the selloff wasn’t exactly surprising. Overall, a pretty good track record.

But for silver it was almost the opposite. Over the past 45 years, it has risen in only two of the biggest stock market crashes (one of which was only 1%), and fallen in all the others. It did fall less than the S&P 500 in five of those instances, but more in two of them.

This data suggests that in the throes of a stock market crash, a decline in the silver price is historically normal behavior, even though it’s usually less than the S&P 500.

 

Here’s how silver has performed during the past seven recessions in the US, going back 50+ years...

In the last seven recessions, the silver price fell in five of them, and rose in two. The range in returns has been wide, including some gains, but overall silver has not logged a strong track record during recessionary periods.

 

 

This is in stark contrast to gold.

Gold has risen in five of the past seven recessions. And in the two it fell, the decline was only by single digits.

This data specifically tells us that silver is not highly responsive to a stock market crash or a recession.

 

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Here is an old Article and would apply again. Low risk is to buy Gold. Silver you have to be quick and can turn down very quickly. 

https://thedailygold.com/why-gold-stocks-have-underperformed-and-what-lies-ahead/

First, we have to understand that gold mining is a very difficult business. The law of numbers makes it even more difficult for the largest producers. They have to operate multiple mines and then continuously acquire or find new resources to maintain reserves and maintain production levels into the future. It’s a difficult business regardless of where the Gold price is. Hence, mining stocks do not outperform Gold over time whether in a bull market or not. The following chart is from Steve Saville who is one of the first to understand this subject. The surge in the 1960s was due to the Gold price being fixed.

Also we must understand that Gold and gold stocks are entirely different markets that share different performance in a panic or crisis. Gold can be a safety hedge but gold stocks most certainly are not. They are the worst performers in any type of crisis. During the 1987 stock market crash, the gold stocks performed far worse than the market. The same happened in 2008 as the gold miners led the market crash.