I and my team have always tried to position ourselves outside the accepted belief system.
As a CIO I don’t sit there in the morning with a call from the buddy at an investment bank saying hey Hugh, we’ve got this analyst who says you should do this, and you should be buying and selling this stock.
I don’t want your first call and I don’t want your last call. In fact I don’t want you to call. We generate our own ideas and it requires the legitimacy of trends.
At this point, the moderator betrays his hatred of Gold, “gold bugs stay gold buys you know til death holed up with guns in Idaho”.
Hugh went from gold bug to Treasury bond bug.
New contentious conjecture we that gold couldn’t reach absurd levels as major investment banks came through and started to endorse very high targets for gold. He began to realize that you required the intervention of paradox. The rubicon had to be crossed by central bankers. They are hated, but they are astute, and none of them would want to go down in history as the author of Weimar 2.
Think inflation, buy long dated bonds. You required the Lehman shock. In order to take Fed Reserve rates to 0 and 3 trillion dollars of money printing.
7:50 … Paul Tudor Jones did that in 1987. He was heralded as a genius and i was heralded as a kind of crazy guy but you know …
Death spiral of mercantilism. To pursue mercantilism, the creditor nations must short their own currencies.
If you are short the JGBs you don’t survive. (Japanese Government Bond – JGB:A bond issued by the government of Japan.)