Herd opinion seems to be a chronically troublesome matter for the allocator of capital. Not only does the herd hold a deep suspicion for making money as such, but it seems that agreement is regarded as an imperative when it comes to considering the future. I might contend that the question; ‘How dare they consider that which all of us are unable/unwilling to consider?’ contains the primary sentiment behind the crowd’s contempt and condemnation… Supposing that this suspicion is true it might be considered quite important for us, as speculators, to overcome this. As ever, we think that it is contrary thought that reveals the key to prudence. Here I invite you to mull over the controversial question in the title; is the crowd capable of correctly identifying intelligence and stupidity? continue reading »

As many of you may already know, the other day Ron Paul expressly mentioned that he would pick James Grant of Grant’s Interest Rate Observer as chairman of the Fed if elected. We cannot conceive of a better candidate for that unfortunately frightful job! Jim Grant is just fantastically insightful when it comes to monetary matters and particularly knowledgeable on the history of money. So, for anyone that might be interested, here I present a short video of his best moments on money, banking and the Federal Reserve over the past few years. See below for the video:

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Hugh Hendry spoke at the London School of Economic’s Alternative Investment Conference. This was a really fantastic interview and we highly recommend watching the following videos in full. See below for the video.

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Behold, after a near-tripling in the total size of the Fed’s balance sheet over just three years, it seems that the monopoly producers of the world’s base currency have finally decided to act in a pseudo-responsible fashion. Although the Fed continues the reality-denying folly of attempting to fix prices in the realm of the production of IOU claims upon central bank notes (ZIRP), at least it’s trying to cease the outright monetary debasement that we’ve all become accustomed to (i.e. central bank balance sheet expansions). Here I outline the implications of a nominally ‘responsible’ (ahem!) Federal Reserve and outline our thoughts on the manner in which the inevitable U-turn back to monetary profligacy might come to pass.

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Jim Rogers spoke at the RBS conference in Austria recently (22/9/11). The main topics were the usual secular investment themes – China, commodities, currencies, the West, the East etc. Also, he had some interesting thoughts about recent trends (see last video) and said that he might buy a place in Austria in the relatively near future.

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[EDIT: For up-to-date real interest rate charts see here.]
 
Real interest rates in the West remain in deep negative territory whereas many countries in the so-called ‘Developing world’ have real interest rates that seem to be headed higher. See below for our monthly global interest rate charts (now with local currency gold prices plotted alongside).

 

[Note: By ‘real‘ interest rates, we mean the short-term inter-bank rate minus the year-on-year growth in the consumer price index.] continue reading »

Russell Napier was interviewed on Bloomberg TV on September 23rd, 2011. He had some interesting thoughts on the diverging trends in the West and the East and the implications for one’s portfolio allocation strategies. It is worth a listen as Russell Napier scarcely appears on financial television — see below for the video and summary.

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