The Madness Of Crowds…The Sanity Of Gold
The comments below are an edited and abridged synopsis of an article by Egon von Greyerz and Matt Piepenburg
Today, central banks are leading the vast majority of investors over a currency cliff. This is easy to predict, despite the fact that most forecasting models are woefully flawed.
Up for discussion: the failure of predictive models; the fantasy of central bank messaging; predicting the end; trust cannot be forecasted; some market forces can be forecasted; timing the impossible and preparing for the inevitable.
“Timing human emotion, blind faith or even collective madness is a fool’s errand.”
“The emotional element of the global economy is too complex for easy modeling, and right now, the vast majority of market participants still trust the ‘experts’ in general and the central banks in particular, to save them.”
“Comforting speeches from the FOMC and empty headlines from the sell-side on the latest tech stock have replaced basic economics, math and history.”
“Stated more simply: Fantasy has replaced facts.”
“Neither I nor you can time the expiration date of this misguided yet ephemeral trust in using counterfeit money to pay for record-breaking debt levels and historically unmatched asset bubbles.”
“But as both history and natural market forces confirm, trust ends once currencies lose their value and the madness of crowd faith in fantasy is replaced by a mad crowd of broke investors.”
“Those who confront facts rather than fantasy, however, can prepare for the unfolding of history and math without having to worry about the precise ‘timing’ of what is otherwise inevitable.”
“Toward that end, the historical remedy for the current wave of policy madness has always been the same: precious metals.”
