The numerous monetary symbols depicted here speak to the fact that the developed economies globally have become over-indebted and uncompetitive. Their strategy to compete effectively with the emerging economies has been to try and devalue their currencies, resulting in a race to the bottom. Since currencies are valued relative to each other, it is impossible for all of them to be devalued simultaneously. Gold, which now is seen as a store of value relative to paper currencies, has been the major beneficiary of this policy.
At Perennial, our analysis focuses on determining what is going on in the overall economy and the expected outcomes the markets are currently pricing. This analysis guides us to invest in opportunities where we will be properly compensated for the risk assumed.
Today investors are bombarded by information in an era of 24-hour news cycles, which only adds to the noise and confusion. Let us sift through the data, do the intense research, and make the tough portfolio decisions. Leave the investing to us.
Balance is the goal when managing an economy. Balancing the government’s budget is difficult when trying to promote growth and job creation for the country’s citizens without causing inflation or burdening the economy with unmanageable debt. Over the last 30 years comfort with debt has led to operating deficits becoming the norm. This change in attitude towards government debt intensified the problems of over-indebted consumers and businesses globally. Burdening future generations with today’s over-consumption has forced this imbalance to record levels.
The “eye of providence” is best known as the eye which appears on the United States one-dollar bill. While many meanings are attributed to this symbol, both religious and conspiratorial, in this instance it represents the key role that US monetary policy and the Federal Reserve (Fed) have played in the economic recovery since 2009. From 1987 to 2006, Fed Governor Alan Greenspan acted as if his job was to ensure that the U.S. economy continued to grow without a pause. Ben Bernanke and the current Fed have now taken this mandate to a new extreme. The “eye” better be right, or there will be serious consequences.