Sometimes it seems like the investment community operates on the assumption that the world started in 1929 – or at least that the financial booms, busts and speculators preceding the 1920s are irrelevant to the modern investor. We think this is misguided. Just consider that this common worldview ignores an age where speculators lived in sprawling mansions on Fifth Avenue (as opposed to apartments in the same place measuring about 1/100th the size)! We imagine that there’s a lot to learn from looking at the past 300 years as opposed to the past 80. With this in mind; here we present what we believe to be the best trades of all time:
Several months ago we brought you a history of the Federal Reserve’s assets in charts — here we complete the story by presenting the evolution of its liabilities from 1915 to 2012.
As mentioned when we examined the assets side of the Fed’s balance sheet:
…the Fed has degenerated from a by and large passive institution (dealing only in high-quality self-liquidating commercial paper and gold) to an active pursuant of junk, an enabler of wars, a ‘benevolent’ combatant of the depressions of its own creation, a central planner of employment & prices and of course a forgiving friend to inconvenient market follies.
[EDIT: For up-to-date real interest rate charts see here.]
Here we present a consolidated view of real rates around the globe. As usual real interest rates in the perpetually-monetizing West are in deep negative territory (although be warned that they’re moving strongly higher at present). In contrast, real rates in Japan and the Czech. Republic are deteriorating rapidly.
The enigma that is eccentricity can be unraveled by grasping this single statement; that which you perceive is a matter of the object of your perception and your apparatus of perception. Eccentricity, then, is as much a quirk of the popular mind as it is of a particular person. So with the assumption that you seek creativeness and insight — here’s how to think eccentrically, find your edge and risk little for lots.