Friday, April 29, 2016

Dr. Albert Friedberg*:
Central Bankers Are The High Priests Of Finance
Taking Us Into Unchartered Territory,
Distorting Economies & Financial Markets
The U.S. & Europe Will Likely Suffer A Fate Similar To Brazil
This is the quarterly conference call of fund manager Dr. Albert Friedberg* .. Friedberg sees the global credit bubble as potentially deflating over a long period of time, characterized by successive crises in different economic sectors - thus far we have had crises in the banking sector & recently the energy sector .. sees the next sector potentially being the junk bond sector .. perhaps the big lesson of this call is his account of what has happened & is happening now in Brazil - central banks targeting a certain rate of inflation, which ultimately leads to a much higher rate of inflation than anticipated or targeted .. Friedberg likes commodities, gold, the U.S. housing sector, though his global macro hedge fund remains net short .. also recommend reading the quarterly report below in case you missed it .. 45 minutes
LINK HERE to the podcast

Dr. Albert Friedberg*:
How Does An Investor Invest In 
This Strange Alice In Wonderland World?
Friedberg Mercantile Group's fund manager Dr. Albert Friedberg* ponders the challenges of investing in this challenging environment characterized by continuous central bank pronouncements & interventions .. "This state of affairs is unprecedented in the brief 200-year history of central banking, and we have therefore no way to judge the ultimate consequences .. Monetary manipulation has succeeded in generating an explosion in debt, debt that has grown much faster than income and the value of assets. This debt will slow real incomes, much as dirt grinds the wheels of a moving vehicle. While debt service is still reasonably cheap, credit spreads will continue to widen and will make it increasingly difficult for debtors to service their debt." .. Friedberg sees central banks as taking on increasingly new & unprecedented measure to deepen & strengthen previous measures which are not working .. Friedberg emphasizes investing in value  .. he is shorting Indian, Korean & Singaporean banks in the belief that the epicentre of the coming debt crisis will be located in China & its surroundings .. on gold: "Gold is an asset that, history teaches us, will perform well in an environment of accelerating inflation. This condition existed in the ‘70s when the banking system was able to intermediate, growing bank reserves, causing money supply to grow at an accelerated pace. This is clearly not the case today and therefore we do not foresee accelerating inflation, although central banks, in their desperation, may experiment with more effective methods of growing money in the future. But gold also performs well when economic agents lose faith in the monetary authorities. The latter was probably the trigger to the Great Inflation of the ‘70s and the extraordinarily long and powerful bull market in gold: the U.S. closed the gold window, terminating the international convertibility of the U.S. dollar and marking the beginning of a new era for fiat currency. Similarly, the adoption of helicopter money may trigger just such a psychological reaction. Finally, it stands to reason that debt deflation enhances the value of gold since it is an asset that does not depend on the creditworthiness of debtors."
LINK HERE to the report

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