Silver, Wine, Art and Gold (SWAG) To Protect From Inflation

Tyler Durden's picture

From GoldCore

Silver, Wine, Art and Gold (SWAG) To Protect From Inflation

Today's AM fix was USD 1,615.25, EUR 1,306.84, and GBP 1,028.04 per ounce.
Friday’s AM fix was USD 1,616.50, EUR 1,306.05 and GBP 1,028.57 per ounce.

Silver is trading at $28.13/oz, €22.96/oz and £18.00/oz. Platinum is trading at $1,476.75/oz, palladium at $599.20/oz and rhodium at $1,025/oz.

Gold edged up $1.90 or 0.12% in New York on Friday and closed at $1,615.90/oz. Silver surged to $28.34 in early trading then fell off and closed with a loss 0.43%.

For the week, gold was 0.3% lower and silver was 0.14% lower.

Platinum hit its highest price is 6 weeks Monday on worries that supply will shrink after the mining massacre in South Africa, at the world’s top platinum producer, last week.

At a mine run by Lonmin, the world’s number 3 producer, 34 people were shot by police over the last week as industrial unrest was brutally quashed. Striking workers may be sacked if they do not return to work today. There are concerns that the volatile political situation in South Africa could worsen and unrest spread to the gold mining sector (see commentary).

Some gold investors are still waiting on clear signals from central banks before re-entering the market.  Prudent investors and those with a more long term time horizon continue to buy or keep an allocation to gold within a portfolio.

Although US gold futures and options fell for a second week, the SPDR Gold Trust, the world’s largest gold backed ETF, climbed 0.9% as of August 17th its highest since July 9th.

Cross Currency Table – (Bloomberg)

Silver, wine, art and gold – or SWAG – may be the solution for investors looking to protect their wealth in the coming years according to perceptive Reuters Columnist, James Saft.

In an interesting article and an interesting video for Reuters, Saft coins the term “Investing 201” which means having SWAG in your portfolio in order to protect investors from “a grim decade of money printing and financial repression.”

SWAG, as in silver, wine, art and gold, are real assets that might just outperform if official policy causes the money supply to surge according to Saft.

This is the idea of Joe Roseman, who says SWAG will do very well over what could be a very troubled next decade.

"These assets effectively act as a money supply index tracker," said Roseman, who for 16 years was a money manager and economist at Moore Capital, run by the legendary Louis Bacon. "If the authorities are going to bail themselves out, money supply will expand. Every single time governments have been here, this is exactly what they have done."

Gold Spot $/oz - (Bloomberg)

Roseman, who now manages his own money, has published a book titled 'Silver, Wine, Art and Gold: Alternative Assets for the Coming Decade'.

His argument, in short, is that a combination of excessive debt, aging populations, resource scarcity and financial repression will bring on extremely poor performance in equities and bonds.

Equities will suffer, and bonds, the traditional safe haven, will hugely underperform as policymakers engineer inflation and seek to trap assets as sources of government funding.

Rather than death and taxes, then, investors will come to fear money printing and financial repression, which will be used to help inflate away excessive debts and corral funds for hard-hit governments.

Under this scenario, what is sure to go up is the money supply, as central banks print and print, either to fund their governments or to ease the real impact of high debt by stoking inflation.

Roseman's argument is that SWAG assets can act almost like alternative currencies, and, unlike fiat currencies, cannot have their supply increased at the press of a button.

You can't magic up more gold or 10 new Picassos. They also, by definition, carry no debt, making their risk profile hugely different from most other assets, implying a lack of correlation and added protection.

In addition, SWAG are not denominated in any particular currency, meaning you are not hostage to a particular monetary or fiscal policy, or even to natural disasters or wars. It's worth noting that the range of SWAG-like assets extends beyond the big four, to include in varying degrees things like palladium and stamps.

A hard currency instrument like gold, but with more industrial uses. Up almost 500% over a decade. Useful as a diversifier from gold. Roseman is optimistic about industrial demand. That said, this makes it a less pure play on the theme of a rising money supply and inflation.

The most investable fine wines have done well over the past decade and studies indicate they have low correlation with traditional assets. Finite supply of the great investment wines, portability and relatively low storage costs are an advantage. There also has been huge growth of demand from prestige-oriented drinkers in China and other emerging markets.

However, this is a double edged sword: while Chateau Lafite, the wine to serve to impress your regional party boss in China, has surged in price, so has fraud. By some estimates the amount of Lafite drunk in China last year exceeded total yearly production by almost 10 times. Wine investing requires storage charges, and wine funds are often quite expensive. Due diligence and caution are key in selecting advisers and storage places, as instances of fraud and overcharging are far from unknown.

The oddest of the group, and the one of which Roseman seems most fond. What is art? Hard to say, but whatever it is, it seems to go up satisfyingly in price, with sections of the market sky-rocketing even during the tough times in recent years.

While I have concerns that this is a market highly dependent on the 1pc, and thus vulnerable to falls if their share of income falls, Roseman believes that the growth of the very wealthy in emerging markets will drive future price growth.

There are collective investment vehicles specialising in art, but once again charges will tend to be high and due diligence is incredibly important. Needless to say, fraud is a real risk.

This is the classic hedge against having one's pocket picked by money printing and inflation. Supply is limited and new sources take time to come on line. Gold has performed fantastically in the past decade -- up more than 400pc -- and has become far more mainstream, attracting institutional investors. Carrying costs can be low, and, thankfully, no need to pay an investment manager.

Roseman argues that for investors with perhaps $5m (€4m) to $10m in investable assets, a weighting of 20pc in SWAG would be appropriate. He urges caution and due diligence.

I have a lot of sympathy with the underlying concerns driving a SWAG allocation, but I do worry about costs, fraud and the potential that the same events that are driving money printing and financial repression could have an impact on wine and art values.

Roseman, argues, convincingly, that actually, compared with many financial assets, SWAG tends to be simple and robust.

In some ways the decision boils down to the classic dilemma facing investors considering paying high fees -- the promise of truly uncorrelated and defensive assets against the sure thing of higher costs to get a shot at the good outcome.

If Roseman is right, my concerns about costs will look small-minded. We agree about due diligence: if huge amounts of cash flow into art and wine, you can bet fraud will rise.

A bit of prudence can go a long way, both in terms of protecting investors through due diligence and in the genuine hedge value of SWAG assets during an all-too-believable scenario of financial repression and rampant money printing.

Saft’s article, Adding SWAG To Your Portfolio can be read here.

Video: Why SWAG May Be A Good Investment - Investing 201 can be watched here.

For breaking news and commentary on financial markets and gold, follow us on Twitter.

(Bloomberg) -- Economist Gartman Is Swapping His Gold in Pounds to Gold in Yen
Economist Dennis Gartman said he is swapping his gold position priced in pounds for more metal priced in yen.

He commented today in his daily Gartman Letter.

(Bloomberg) -- Gold would head for $1,700 an ounce if it climbs above $1,640, confirming the bullish outlook, Barclays Plc said.
Silver has “nearby resistance” at 28.4 cents an ounce, and selling would probably be triggered at 28.9 cents an ounce, Lynnden Branigan said in an e-mailed report today.

(Bloomberg) -- UBS Says South African Platinum Losses May Reach 70,000 Ounces
Platinum production losses in South Africa may reach 70,000 ounces before conditions improve after striking workers were killed last week, UBS AG said.

Output losses were about 10,000 ounces in six days, the bank said in an e-mailed report today.

(Bloomberg) -- South Africa’s government, mining companies and labor unions will form a group to investigate how to improve conditions in the platinum industry, the South African Press Association reported, citing Susan Shabangu, the mines minister.

The decision followed a meeting today to discuss issues facing the industry after police shot 34 striking miners during a protest at Lonmin Plc’s Marikana mining complex on Aug. 16, the Johannesburg-based news agency cited Shabangu as saying.

(Bloomberg) -- Gold Traders Trim Bets on Price Rise, CFTC Data Shows 
Hedge-fund managers and other large speculators decreased their net-long position in New York gold futures in the week ended Aug. 14, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 114,304 contracts on the Comex division of the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions fell by 1,196 contracts, or 1 percent, from a week earlier. 

Gold futures fell this week, dropping 0.2 percent to $1,619.40 a troy ounce at today's close. 

Miners, producers, jewelers and other commercial users were net-short 143,940 contracts, down 2,478 contracts, or 2 percent, from the previous week. 

(Bloomberg) -- Silver Traders Increase Bets on Price Rise, CFTC Data Shows
Hedge-fund managers and other large speculators increased their net-long position in New York silver futures in the week ended Aug. 14, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 15,587 contracts on the Comex division of the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 1,907 contracts, or 14 percent, from a week earlier. 

Silver futures fell this week, dropping 0.2 percent to $28.09 a troy ounce at today's close. 

Miners, producers, jewelers and other commercial users were net-short 23,402 contracts, an increase of 1,550 contracts, or 7 percent, from the previous week. 

(Bloomberg) -- LBMA Says Gold Trading Fell 6.4% in July to Lowest Since 2010
Gold trading fell 6.4 percent in July to an average of 17.9 million ounces a day compared with June, the London Bullion Market Association said today in an e- mailed report. That’s the lowest since October 2010, the LBMA said.

Silver trading dropped 5.3 percent to a daily average of 141.5 million ounces, the lowest since April, the LBMA said.

Gold hovers as investors eye central bank action – The Sydney Morning Herald

Platinum extends gains on Lonmin strike, gold steady – Reuters

Striking South African miners face dismissal – The Irish Times

Italian cash-for-gold shops quadruple as debt crisis deepens
– The Telegraph

In hard times, "I buy gold" is Italy's boom business - Reuters


Are We About To See A Chinese Gold Rush? – The Telegraph

Sunny skies: China’s gold ambitions – The Financial Times

Platinum  mine violence impact - Could it spread to gold too?  - Mineweb

Brits lose trust in banking system - MarketWatch

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dannyboy's picture

Swagger, bitchez.

GetZeeGold's picture

Silver, Wine, Art and Gold


Fella could have himself a pretty good weekend in Vegas with all that stuff - Slim Pickens



malikai's picture

Schwag is an even better investment. For the thrifty, of course.

AlphaDawg's picture

Best have a trade, would be jive if you had to sell your assets during a downturn

BaBaBouy's picture

OK, I can live with it...

Butt I'll spell it G-SAW ...

redpill's picture

If I were to stockpile booze (which typically isn't very successful since I enjoy drinking it so much), instead of wine (which is fragile and requires very specific storage conditions) I would stockpile rare distilled beverages.  Scotch, Cognac, Armagnac, etc.  It's easier to store (typically upright), and is less environment-sensitive than wine.  Also it won't "go bad" like some wine can do if the cork gets dry or rots.  Also during SHTF it has more utility.  Hell even a case of plain old Jack Daniels is a good thing to have if you have the space for it.

krispkritter's picture

Copper! In the form of a still that is. Have a small one, need a bigger one...much bigger...

Dr Benway's picture

Get a Louis bag for what? Bitch I been had swag, I got fifty thou cash in a brown Kroger bag

Dr Benway's picture

And yes, you can forget about diamonds. Have you ever tried to sell a diamond?


Classic article, and much still is true today:

BaBaBouy's picture

G-SAW ...


If you have plenty of fiat and know what to buy, you are making big money in Art for the last Many Years...

Plus you can show it off in your Salon to all the LADIES...

Vooter's picture

"Hey, ladies, look at all my cool, expensive artwork! NOW will you pay attention to me? Please?"

jekyll island's picture

I was OK with the article until you brought in a Gartman reference.  

GetZeeGold's picture



Just wait 5 minutes.....



redpill's picture

Art is too fragile, and the wine always gets consumed, so I'm left with S&G, which is just fine :)

Dr. Richard Head's picture

Tis better than the inherent S&M that comes with the paper market.

PhilB's picture

Folks..i thought i would do my good deed of the day and give you a followup to Facebook's liabilities to its users. In addition to the Marines being arrested for posts or for employees being fired for complaining on facebook, here comes what appears to me ought to be a huge violation of privacy rights.

Facebook is using face recognition as a default on its users allowing them to identify their users in uploaded photos (without prior consent). At least one country finds this absolutely scary..good ol' Germany.,7340,L-4270311,00.html


I dont know what to say except that in the US our rights appear to be ever dwindling and the internet can and is being used against notions of free speech and privacy. 

Financial and social repression is a thing to stand out against. Time is running out.

flattrader's picture

I am working on a poltical campaign and have an outside group trying to muscle in on the action for their own PR purposes.

I recently had some late 20 something trying to verify some info I told him about myself by looking on FB.  He was surprised when there was no info.

I explained to him that I valued my privacy. He looked at me quizically...

I also explained that anyone who needed to know certain things about me and my capabilities already knew about them...and he wasn't among them.

And while we were having this discussion about some kind of FB verification of my claims that he though should exist, I had already stabbed him and the group he represents in the back by beating them to city hall and the court house...and he didn't even know it.

It was sweet.

"Age and Guile Beat Youth, Innocence, and a Bad Haircut."

Vooter's picture

I'm crazy and white, but not lonely or rich...

Ace Ventura's picture

"I mean, WHO does something so zany as buy silver BULL-YON!"


LOL! Nothing funnier that watching million-dollar MSM talking bubble-heads spew on and on about things they have absolutely ZERO clue about. What makes it funnier is that there is a good chance that despite her potential belief to the contrary......Nancy does NOT have a reserved seat at the after-party table.

Ckierst1's picture

SWAGA, dannyboy, cuz they forgot "A" for Ammo!

new game's picture




there its c0rrected..

rufusbird's picture

Wine as an investment makes me laugh. You can make wine for about a dollar a bottle.

redpill's picture

You can also buy a Tata Nano for $1,800, but for some reason Porsche has no problem moving 911s.

rufusbird's picture

Perfect example. My Daughter bought a new silver Nissan 350 a few years ago and paid cash. A year later she bought some property and wanted to raise money and offered the Nissan at half of what she paid for it. No takers. She is still with it.

I had a porsche. So glad to get rid of it. Nice machine but expensive to maintain. Definately not a good investment. More like an expensive toy.

LukeWorm's picture

I'm not so sure about the Wine part

Wine, also fine wine, is for drinking and enjoyment. 

CH1's picture

I'm not so sure about the art part. A DaVinci or Carravaggio, sure; a black blotch on a white canvas, not so much.

AlphaDawg's picture

Only Art I like is pink with a 50 top RHS and a pictue of the queen, which i convert to silver

TN Jed's picture

I received a Dali from my grandmother 10 years ago.  Artist proof, signed and not a single person has ever asked or commented on it.  Makes me wish I had more because putting things on walls is easier than in them.

tabasco71's picture

The 5yr returns on your LIV page look ok...

Other obscure investables are cigars... apparently they are stored and can appreciate in a similar manner to wine and art.

Moet Chandon has some stock ranging back over some 40 years, although that is arguably more R&D than outright investment.

GetZeeGold's picture



Those guys must have studied the history of Vietnam and Nazi Germany....which by the way seems to be making a comeback.

malikai's picture

"Investment Wine"? WTF? I thought you're supposed to drink the stuff..

Man, I'm in another world here..

gaoptimize's picture

In the dystopia I see coming, vodka, whiskey, and rum will have a larger market and demand.  In the liberty that may be created by a devolution of authority, distilling might be a livelihood or profitable hobby.

urbanelf's picture

Yeah, SAG just doesn't have a nice ring to it.

malikai's picture

Better than Schwag. Which I think would be an even better investment.

LeisureSmith's picture

Just replace the Wine with Weapons and the Art with Ammo aaand it's a wrap. SWAG.

I see i'm late to the party, fashonably late.


Tortuga's picture

What's up with this? No "gold bitchez", no sunk boats, no Ron Paul? Must have been a hellava party weekend.

fuu's picture

I lost my Ron Paul in a golden boat accident bitchez!

krispkritter's picture

HO BAG...HOled Boats And Gold...

LawsofPhysics's picture

SWAG, Oh that's clever.  I'll just add, long farmland and sharecroppers.

XitSam's picture

"Hey, I've got a catchy acronym for an investing style, help me think up things that it could stand for so I can finish this article."

buzzsaw99's picture

long the grapes of wrath bitchez

Tinky's picture

Reminds me of my favorite Will Ferrell quote (from a tweet):

"I hate it when I forget to turn off my swag at night and I wake up covered in bitches..."

Lost Wages's picture

You can't eat art. Tastes like oil paint.

LoneStarHog's picture

Hey, GoldCrap, put the Doobie down and wake up!

SWAG:  Silver .. Weapons .. Ammo .. Gold

If you secure sufficient "Weapons", you may start substituting with "Women".