"Chuck Prince famously said we have to dance until the music stops. Actually the music had already stopped when he said that."
Chuck Prince was the CEO of Citi Group during its implosion that brought markets down in 2008......and in similar vein Robert Rubin, Clinton's treasury secretary (who was Citi's Chairman of the board during the bank's 2008 collapse), last year in answer to a question about the biggest threat to financial markets at a NYU fireside chat with students said derivatives are the biggest threat. Given his involvement with the events that brought the system down in 2008 you'd think he would know. By the way last night it was announced that the current CEO of Citi jumped ship handing over the reins for the first time to a woman. This seems like a red flag to me, given as I have said Citi has off-shored (hidden/obscured) 70% of its derivative exposures using a loophole in Dodd Frank which was designed to bring these transactions into the light in the US over the counter markets.
The music may have stopped already, it's just hard to see which door the band has left the building from.
If you follow my argument here, I think holding physical gold is where you want to be if you are interested in gold or alternatively have your liquid assets in a mixture of $A and physical gold until we understand whether or not the music has really stopped or not. Any "true" tailwinds for gold through inflation will come much later after the economy and financial system have based out and the green shoots of economic growth return unsupported by the Fed. The uncertainty between now and then is huge and a lot of adverse things can happen especially to equities as history attests. With ever decreasing yields in all markets the risk of owning most financial asset is very high at the moment.Esh
