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How To Invest When The Pursuit Of Certainty Is Absurd
Submitted by Tim Price via Sovereign Man blog,
The start of the New Year is traditionally a time for issuing financial forecasts. But there seems little point in doing so given the impact of widespread financial repression on the price mechanism itself.
Are prices real, or fake? The cornerstone of the market structure is the price of money itself – the interest rate. But interest rates aren’t being set by a free market.
Policy rates are being kept artificially low by central banks, while the term structure of interest rates has been hopelessly distorted by monetary policy conducted by those same central banks.
Inasmuch as ‘real’ investors are participating in the bond market at all, those institutional investors have no personal skin in the game – they are economic agents with no real accountability for their actions.
Other institutional players can be confidently assumed simply to be chasing price momentum – they likely have no ‘view’ on valuation, per se.
The world’s bond markets have become a giant Potemkin village – nobody actually lives there.
So of the four asset classes to which we allocate, three of them offer at least some protection against the material depredations and endless price distortions of the State.
‘Value’ listed equities give us exposure to the source of all fundamental wealth – the actions of the honest entrepreneur. Systematic trend-following funds are the closest thing we can find to truly uncorrelated investments – and we note how 2014 saw a welcome return to form.
The monetary metals, gold and silver, give us Stateless money that cannot be printed on demand by the debt-addicted.
We are slowly coming to appreciate the counsel of a friend who suggested that the merit of gold lies not in its price so much as in its ownership. What matters is that you own it. (It also matters why.)
Which leaves debt. Objectively high quality debt – a small market and getting smaller by the day.
The practice of sensible investment becomes difficult when our secondary information sources (“fundamentals”) are inherently subjective.
It becomes almost impossible when our primary information sources (prices) can’t be trusted because they have politicians’ paw-prints all over them.
If the pursuit of certainty is absurd, the only rational conclusion is to acknowledge the doubt, and invest accordingly.
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The world’s bond markets have become a giant Potemkin village – nobody actually lives there.
Actually, I live there.
I'll take the Blue 'Crazy' Pill, please...
To possess gold and silver, they need too be locked in your vault or safe and be protected by a good
alarm system and your own personal assault rifles, shot guns and semi-auto pistols.
Not only can you eat it you can wipe yer ass with it
If I listened to Tyler I'd be short the dollar so WTF does he know
https://www.youtube.com/watch?v=VI6tBwVjyOY
"How to invest when the pursuit of absurdity is certain."
Fixed that for ya.
Gold, bitchez.
Hah. The main safe is for a couple hundred dollars in $20s and costume jewlery. Gold and silver go inside false electrical outlets, under the floor, inside vents, in a junky old cardboard box in the attic. . . and mostly in the lake from that tragic boating accident.
Or somewere in the foundation off your house between the reinforcement bars, good luck finding it and getting it out unnoticed. A safe is the worst place to put your gold. If some robber puts a gun to your head, are you really going to refuse to open it. the world is full of idiots that can't think for themself.
That's why there is a loaded gun in it as well.
Think Chaplin dancing on the globe in the great dictator...thats where we probably are heading.
Adenoid Hynkel and Benzino (oh, the à propos of that name) Napaloni.
Potus and Putin ! Schultz would be Nuland !
https://www.youtube.com/watch?v=vWz9VN40nCA
I wonder if one ounce pure will be paying too much for a previously owned Tesla.
<--- 1oz Bolivian marching powder
<--- 1oz Au
Waaaaaaay too much. A Bic lighter is only about $1.50 and more portable.
Can't go wrong buying PM's in this adulterated market.
You said the same thing at $1800 while most any unmanaged stock fund has tripled. Do you want to add a qualifier this time?
Stocks are for risk taking, Au and Ag are a hedge against fiat. When fiat inevitably collapses and is replaced by a new currency $1800 will be looked upon with envy and nostalgia.
I know your comment was not directed to me, for, I never spoke about or even printed anything about buying PM's @1800.00
Get real!
After a $40 move off the lows in the last 1-1/2 trading days, it will be interesting to see what the cartel has in store the rest of this week. The usual pattern is to get some Fed/Draghi talk going, hang anyone that opened a short stawk position while driving stawks back up, and monkeyhammering gold in the pre-market. The only variation now is the price of oil.
War is American. If you think the US can win, buy American Funds. If not, buy PMs and BTC while it's still low.
Where is this war?
Isn't the reason commodity prices have totally collapsed because there really is no "American war" at all?
Clearly this is a bad way to pay off the trillions in debt tho.
Where is all that inflation so we can roll this thing over again? Looks more like a pig at a pig roast right now. "Roll this thing over" all right. "Makes for a nice, even roast."
You know the tide is starting to turn when one starts looking more frequently at the price of PMs than the price of the S&P.
Question for the Tylers: Is there any way to tabulate and chart the number of hits on precious medal sites?
Economies are built from the bottom up and destroyed from the top down. The empire assumes a given input, what it can see, increasing scarcity in a closed system, and seeks a particular outcome, wealth transfer through natural resource exploitation, creating income inequality, from a growing body of poverty to a shrinking population of excess.
My wife is much slower than her bosses like, because she is intercepted by people they don’t know, increasing quantity and quality, and the more they try to replace her, the more people they don’t know intercept her, until I decide to drop the load.
Uber is being fed toilet paper by the Fed, through pensions, foundations, etc., while bypassing legislation created for the purpose, and rolling over leverage with more M&A, to distribute I-phones, increasing capital control. What do you suppose happened to all those other critters who tried to bypass taxi regulation?
Those planets are revolving and the critters can’t see the HVIAC. The sun does not create energy. Those black boxes keep surprising the critters. Maglev is about to be three generations behind the curve, and not everyone was keen to let Brown & Co steal that land, for more of the same, licenses denied to residents and given to illegal immigrants.
Funny, you come back after 35 years and the critters that have since moved in to steal everything they can lay their hands on with artificial business cycles, to grow G economic activity market share, think that they have the advantage. Real wages increase with RE and associated activity deflation.
The State can give you back your licenses or blow itself up. Labor doesn’t care either way, or what monetary policy is applied next. The critters are bewildered because all they can see in that scope is the past.
What’s new?
Weak signals from divergent world tracks are amplified by feedback loops as experiential reality and causality converges.
Longest streak in 87 years ended today.
The S&P 500 hasn’t had a 4-day losing streak in 264 trading days. This is the longest such streak without a 4-day decline in the past 87 years.
http://kimblecharting.tumblr.com/post/107227538901/longest-streak-in-87-...
Gold and silver are not investments; they are stores of value. If you're "investing" in PMs, you're doing it wrong.
Agreed. A point always missed. And if you are going to buy, mind as well until the dollar momentum has stopped.
If people want to get rich of metal it will only happen in a total collapse. And we still have much more time before that happens.
I do think people should be accumulating metal now. Just no rush to go all in yet.
Price? Wasn't that the name of the German spy in Stalag 17?
Author says buy gold because stock and bond markets are repressed? fake? Corrupt? manipulated?
WTF does he think the PM markets are... honest and fair and free market pure?!?!!?
Fair point -- but if there is manipulation, right now it seems to be in the direction of keeping the price artificially low. Under those circumstances, why not buy?
Right on, stock market manipulation = short term gains, long term kaput / PM manip = long term gains, short term not relevant.
I have always been of the opinion that the price of gold does not matter. Because the reason for owning it is NOT to trade it. The purpose is to maybe use it to survive when everything else has no value.
This explosion when it does come will end civilization so although I still hold gold, I am not so sure it will do me any good. Even if I am alive when this goes down
The reason to buy or own pms is that they are way oversold and the entry point is outstanding. If you hold them already, they are long term insurance. Pms at this point are just about the smartest placement of capital given the incredibly large potential of a black swan upsetting the equity trend of 6 years. I doubt a Mad Max scenario happens, as there are some good people, but some Folks will feel some Pain.