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Re: A Video for Fred/EJ....(Gold bugs do not watch!)
Luke,
Do you think it's impossible for both the USD and Gold to keep rising?
Originally posted by Lukester
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Hugh Hendry is a very bright chap. I give him 100% for sussing out the next two year trend. This is what I've been reiterating. Gold, and all inflation hedges are WEAK for the next one year, and likely two years. In a world where -5% inflation eventuates, the EURO will crater due to it's large exposure to emeging markets (which plunge much more) and the USD handily wins the ugly contest. I've sold a large chunk of gold and silver in my EU based accts. and parked my money in the USD. Meantime, the YEN is apparently breaking down now against the USD also. If it does, and Euro worsens drastically as Hendry forecasts, what's left standing against the USD?
I don't wish to poke iTulip's stance in the eye. iTulip are the beacon for the "big picture" and I for one am immensely grateful to them for the priceless intelligence they have provided this past two years. But the imminent breakdown of the USD due to unsustainable internal and external debt is a creature that can behave in more than one single way. It seems to me it has two, or three, or more avenues to unfold, and one of those avenues is that a global disintegration such as Hugh Hendry points out, turns upside-down the two most popular consensus opinions in this community at present. That gold is fated to rise and the USD is fated to fall. Hendry is putting forward his view, that we likely are entering a longish period where it can very well be the reverse. Does anyone begin to get Hugh Hendry's viewpoint?
No-one is saying go and sell all your gold. If you've read iTulip enough you know what the macro trend is - inevitably. But the bullish chatter about gold is really a bit too generic. Notice what Hugh Hendry says about regarding gold as a "back up the truck now" investment. (he's taking the opposite viewpoint to those who subscribe to: COMEX will default, or XYZ will happen, etc. etc.). As he puts it, "People have rushed to read the last chapter of the book" and as he says, "you just can't do that". If you are in ex-USD currencies any downside in gold would be much more muted for you, and/or it may continue to do moderately well. But in USD it has a possibility of being more of a sagging investment than one might first conclude, for the next year to 18 months, to 2 years. Nothing's certain, but there is a possibility, if the reality of -5% inflation extending occurs. Hugh Hendry seems to think that possibility is good at this point.
It's understood though that iTulip's recommended allocation (as I understood it) of about 30% in the present environment is, "not intended as an investment, but as insurance". It is a very sensible allocation and it looks like iTulip "picked the right gear to climb the hill" eight or nine years ago and has ridden this far without changing gears much at all. One wonders whether they are even breaking a bit of a sweat yet.
That is actually an exemplary sobriety in money management (not that I followed it, and that wound up to my detriment). When you can calibrate your defensive asset allocation "putt" from year 2000, and get a rough idea of where it's going to land in 2012 without so much as having to adjust your trajectury one bit, you are batting a pretty good average.
Anyway Hugh Hendry is an damn good analyst IMO. I really appreciate this hedge fund manager's acumen.
Meanwhile, here's iTulip, proceeding without so much as a change of altitude into this turbulence.
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I don't wish to poke iTulip's stance in the eye. iTulip are the beacon for the "big picture" and I for one am immensely grateful to them for the priceless intelligence they have provided this past two years. But the imminent breakdown of the USD due to unsustainable internal and external debt is a creature that can behave in more than one single way. It seems to me it has two, or three, or more avenues to unfold, and one of those avenues is that a global disintegration such as Hugh Hendry points out, turns upside-down the two most popular consensus opinions in this community at present. That gold is fated to rise and the USD is fated to fall. Hendry is putting forward his view, that we likely are entering a longish period where it can very well be the reverse. Does anyone begin to get Hugh Hendry's viewpoint?
No-one is saying go and sell all your gold. If you've read iTulip enough you know what the macro trend is - inevitably. But the bullish chatter about gold is really a bit too generic. Notice what Hugh Hendry says about regarding gold as a "back up the truck now" investment. (he's taking the opposite viewpoint to those who subscribe to: COMEX will default, or XYZ will happen, etc. etc.). As he puts it, "People have rushed to read the last chapter of the book" and as he says, "you just can't do that". If you are in ex-USD currencies any downside in gold would be much more muted for you, and/or it may continue to do moderately well. But in USD it has a possibility of being more of a sagging investment than one might first conclude, for the next year to 18 months, to 2 years. Nothing's certain, but there is a possibility, if the reality of -5% inflation extending occurs. Hugh Hendry seems to think that possibility is good at this point.
It's understood though that iTulip's recommended allocation (as I understood it) of about 30% in the present environment is, "not intended as an investment, but as insurance". It is a very sensible allocation and it looks like iTulip "picked the right gear to climb the hill" eight or nine years ago and has ridden this far without changing gears much at all. One wonders whether they are even breaking a bit of a sweat yet.
That is actually an exemplary sobriety in money management (not that I followed it, and that wound up to my detriment). When you can calibrate your defensive asset allocation "putt" from year 2000, and get a rough idea of where it's going to land in 2012 without so much as having to adjust your trajectury one bit, you are batting a pretty good average. Anyway Hugh Hendry is an damn good analyst IMO. I really appreciate this hedge fund manager's acumen.
Meanwhile, here's iTulip, proceeding without so much as a change of altitude into this turbulence.
[ATTACH]1147[/ATTACH]
Do you think it's impossible for both the USD and Gold to keep rising?
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