Brilliant use of the Vesuvius analogy! The parallel between ancient Romans not having a word for volcano and modern investors not recognizing the bond market danger is well-drawn. I had a similar realization back in 2020 when I started repositioning out of fixed income, the shift from that 40-year downtrend really does feel like one of those slow-motion earthquakes nobody wants to acknowledge until its too late.
Excellent analogies here and warnings about what risk actually means. I wonder, though, can gold serve the role of base collateral in the world today? after all, since the amount is not going to increase very quickly, the price will need to do a lot of work to underpin the nominal value of outstanding debt and transactions. consider there are over $300 trillion in debt outstanding around the world. does that mean gold needs to go to $50k, or are we looking at a major deflation/depression as debt is repudiated?
Brilliant use of the Vesuvius analogy! The parallel between ancient Romans not having a word for volcano and modern investors not recognizing the bond market danger is well-drawn. I had a similar realization back in 2020 when I started repositioning out of fixed income, the shift from that 40-year downtrend really does feel like one of those slow-motion earthquakes nobody wants to acknowledge until its too late.
Excellent analogies here and warnings about what risk actually means. I wonder, though, can gold serve the role of base collateral in the world today? after all, since the amount is not going to increase very quickly, the price will need to do a lot of work to underpin the nominal value of outstanding debt and transactions. consider there are over $300 trillion in debt outstanding around the world. does that mean gold needs to go to $50k, or are we looking at a major deflation/depression as debt is repudiated?
Brilliant as ever - it made me recall your comment from years ago that bonds were ‘return free risk’.
Many thanks Tim
Always look forward to your excellent blogs 👌