Dec 12, 2017

Jim Grant on gold vs. cryptocurrencies

I feel as if cryptocurrencies have stolen a bit of the thunder of our favorite alternative monetary asset. But the gold market will respond to the demonstrated failure of radical monetary policy. I have no idea when that collective perception might come that the central bankers are not fully clothed. But it will come, and a good portion of the world will come to the conclusion that gold represents a very good store of value outside the banking system and outside the electrical grid and outside the world of technology. These cryptocurrencies, on the other hand, propagate like rabbits: One day there are 900 cryptocurrencies, the next week there are 1200 and the week after that 1500. On the contrary, gold has been with us for millennia and the only way to get more is by a collision of two neutron stars or something like that. So alchemy may work in the cryptocurrencies but it’s not going to work in gold.

~ Jim Grant, "James Grant: Markets Trust Too Much in the Presence of  Central Banks," December 11, 2017, Finanz und Wirtschaft

Jim Grant on the Swiss franc

In the past, Switzerland had a certain franchise. It was a financial franchise based upon prudence, discretion and judgement in banking. It was based upon tradition and upon some kind of a stiff-necked independence from the rest of the world and the world’s central banks. I think those traditions and that franchise have been eviscerated to a great extend through pressure from the outside world and through the changing mores of worldwide regulation. So the Swiss franchise in judgment and discretion has now been rebranded to a franchise in secrecy which is all about the despots of Africa secreting billions of US dollars into Swiss bank accounts.

 That’s my opinion as an independent observer. I can describe the problem but, for the life of me, I don’t know what Switzerland should do to revert to its privileged place – a privilege well-earned in a world that has gone rather mad. The Swiss brand is still recognized worldwide. »Made in Switzerland» is one of the great phrases in the world of commerce. But I question the validity of the specific financial franchise and the desirability of the Swiss Franc. However, that’s my opinion. The world’s opinion is that the Franc is not the storm in a port but a port in a storm. That’s what the world thinks. So the Swiss must live with that and the way they do that is to depreciate the once sacrosanct Franc. They do it by creating Francs at no costs, convert them effortlessly into Euros, trade in those Euros into Dollars and then buy American equities at record high valuations.

~ Jim Grant, "James Grant: Markets Trust Too Much in the Presence of  Central Banks," December 11, 2017, Finanz und Wirtschaft

Dec 7, 2017

Ralph Charell on success

Nobody succeeds beyond their wildest expectations unless they begin with wild expectations.

 ~ Ralph Charell, author

Robert Allen on risk taking

Everything you want is just outside your comfort zone.

~ Robert Allen, author and speaker

Proverb on being late to the party

What the wise do in the beginning, fools do in the end.

~ proverb

Dec 5, 2017

Corrie ten Boom on worry

Worry does not empty tomorrow of its sorrow. It robs today of its strength, its courage and its joy.

~ Corrie ten Boom

Dec 3, 2017

Anthony Deden on confusing money printing with wealth creation

Frankly, we now have two generations of economic agents who are entirely ignorant about the nature of money. We welcome rising prices and see them as wealth even as they are merely the result of inflation. We demand more cash to save the system, instead of allowing those who fail to go bankrupt, so that more efficient competitors can emerge. We have tolerated the Swiss National Bank sale of our gold reserves in exchange for American paper money and promises.

We demand cheaper currency to stay competitive because we do not know the true nature of competitiveness. If cheaper currency is the source of wealth, where has Bangladesh gone wrong? If cheaper money means economic prosperity, why not just print as much as we can and give it out to everyone? We have become fools. The customers know nothing and the advisers know even less. And then we have the idiot economists—the neo-classical, Keynesian variety with solutions to problems they did not even anticipate; solutions that have, in fact, long been discredited. And so we lurch from crisis to crisis—eating our meager capital in the hopes of becoming rich in money. It’s a pity.

~ Anthony Deden, "Reflections on the Role of Gold in Investment Practice," November 19, 2009