2020-12-09
This perhaps self-interested piece by Egon von Greyerz of Matterhorn Asset Management provides a useful and perhaps timely reminder of the current seemingly precarious world of financial investments.
Note that financial corrections are not by and large destructive of real assets - they are simply revaluations that bring market prices back to earth to provide a more realistic basis for the markets to do their proper work of discovering prices going forward (if left to their own devices). Such a rebalancing would send many with precarious finances to the wall, allowing the more solvent to pick up their assets at fire-sale prices.
The big problem with working out where the financial markets are going is that politicians and central bankers do not leave them to their own devices, and have not done so for many years. What novel (and potentially destructive) wheeze are they going to spring upon us next in their bid to "reset" the worlds of finance?
How close are we to that point? Will the "Great Reset" help or hinder? Will it work in favour of our pensions or will it favour the global corporations and their "masters of the universe" who dream of green and who some think frequent Davos?
Certainly I do not have the answers, but I do think that now is maybe not the time to buy over-valued stocks (admittedly not very useful advice, since this statement is arguably always true!).
Whilst we can't say that even gold will be immune from a downward revaluation in whatever "Great Reset" may be shortly upon us, Egon may be correct that of all the "assets" out there, it does have a solid track record over centuries that stocks shares currencies and government and other bonds lack. Food for thought, and not necessarily bullet-proof, but by comparison with many stocks, some might consider precious metals to be relatively safe.
