Posted by rahrens_1 on August 19th 2011 at 02:53 pm
Don Coxe Update – The Deficient Frontier
Don Coxe Update
(Aug 18th, 2011)
- notes gold is saying it’s not a normal financial crisis, but an existential risk
- has coined the term ‘The Deficient Frontier’ (vs Efficient Frontier) to draw attention to this
- see’s a gradual unraveling of the efficient frontier
- risk due to no confidence in a model to value assets
- of the big currencies, USD, Yen, Euro, and the Swiss Franc, their needs to be a better way to value the Euro
- Merkel meeting was a disappointment
- due to this ECB will have to walk a fine line
- private sector is better than the public sector
- the market is loosing a sense of itself
- pullback in oil is helping the inflation situation
- winning investment strategies will be asset mixes that are very unconventional
- European financial sector is in worse shape than the US
- people are comparing Europe to the US congress with states under it, but that’s not the case
- Canadian financial assets will continue to outperform for the short term
- he expected the Cdn dollar to move to $1.08 and that would seriously affect the Cdn economy, admits a very bad call on his part
- not a time for Canadians to move money out of the country, stay close to home
- treasuries are having a great rally after the S+P downgrade, proves
- gold is telling you it’s one asset that can’t be created fast
- gold is decoupling from the Swiss Franc, too much printing even in Switzerland
- gold is becoming the only haven left
- pensions are using a model that is now broken giving them serious challenges
Q+A
1. How long can real negative rates continue?
A: At some point yields will jump but are subsidized at present by Europe problems. Not wise to be short the bond market.