The Faustian Bargain

[giofranchi]

Very good paper on the evolution of Central Banks.

FFH with its CPI-linked derivative contracts is a great hedge against deflation. Gold might be as good an hedge against inflation. Until we don’t know with certainty, if the deflationary forces caused by the winding down of too much debt will prevail on the Central Banks printing presses, or vice versa, owning some gold doesn’t look like a bad idea to me.

 

giofranchi

guggenheim_82212.pdf

[Rabbitisrich]

Winning article on gold from the Adonis team at FT Alphaville: http://ftalphaville.ft.com/blog/2012/08/27/1128691/china-dollars-gold-and-a-theory-of-relativity/

[bmichaud]

I think Einhorn says it best (paraphrasing), that gold is a hedge against inflation AND deflation...i.e. central bank stupidity and economic uncertainty.

[giofranchi]

I think Einhorn says it best (paraphrasing), that gold is a hedge against inflation AND deflation...i.e. central bank stupidity and economic uncertainty.

 

Or, this time paraphrasing Mr. Dalio, a 10% allocation to gold is a very good way to diversify the remaining 90%.

 

giofranchi