Doesn't the way CHF behaved during the recent turmoil qualify as a safe haven to you? In fact CHF was the only real safe haven (alongside EUR partially, but for other reasons imo) when Trump hit the fan. CH is maybe the only remaining country that runs fiscal austerity (with other people's money), so isn't it an ideal place as a safe haven globally?
It's a good question. Euro is definitely under owned which gives it a bit of safe haven nature. But as opposed to 2008 to 2011 CHF did not appreciate faster than Eur.
I like CHF as Swiss historically watched gold more closely and have better govt finances... but as a safe haven it's not the same as during Eurocrisis
A safe haven asset needs to be safe when you need it, aka when shit hits the fan. A direct comparison on the year between 2 candidates isn't telling much imo. What does tell you more is the fact that since April 2nd, CHF has outperfromed JPY by 3%. For a pair that can easily have a 5% vol when nothing happens in risk assets.
Curious what you think of TIPS. Long dated have real yields of 2.5% (last week was higher). I guess its important if you trust CPI to accurately reflect inflation.
Great piece, thank you! I would also say that this leads to the conclusion that market participants are all in. So not much upside in most asset classes.Although for most people, and market commentators it still the question 'when will interest rates come down again' instead if 'will interest rates come down'
I think this is quite perceptive, but perhaps should not be surprising. given Trump's efforts to reshape the entire global economic/monetary framework, other than gold, I expect it will be a while before something is seen as safe again
That's like a thought that Felix Zulauf has had. It's a time not to make money. It could be a time just to lose less than others. I dont think many investors or retirees want to think about that.
What are the “circumstances” under which cash is an effective option in a double-digit inflation scenario? I suppose it could be considered the “least bad” option. Or maybe it’s a matter of “time frame” and cash could work in the short-term.
Its a really good question. So cash at the moment does give you 4%... alot of people hate cash... especially if you are of the view that markets always go up... I feel its more least bad option at the moment. I think politics is trying to reduce income inequality, so just maintaining wealth in nominal terms is a win
Doesn't the way CHF behaved during the recent turmoil qualify as a safe haven to you? In fact CHF was the only real safe haven (alongside EUR partially, but for other reasons imo) when Trump hit the fan. CH is maybe the only remaining country that runs fiscal austerity (with other people's money), so isn't it an ideal place as a safe haven globally?
It's a good question. Euro is definitely under owned which gives it a bit of safe haven nature. But as opposed to 2008 to 2011 CHF did not appreciate faster than Eur.
I like CHF as Swiss historically watched gold more closely and have better govt finances... but as a safe haven it's not the same as during Eurocrisis
CHFJPY is flat on the year - and JPY strengthened vs CHF slightly on Liberation day 4/2
A safe haven asset needs to be safe when you need it, aka when shit hits the fan. A direct comparison on the year between 2 candidates isn't telling much imo. What does tell you more is the fact that since April 2nd, CHF has outperfromed JPY by 3%. For a pair that can easily have a 5% vol when nothing happens in risk assets.
Curious what you think of TIPS. Long dated have real yields of 2.5% (last week was higher). I guess its important if you trust CPI to accurately reflect inflation.
So far we found the capital gains loss from higher rates to be greater than the gain from inflation with TIPS....
Great piece, thank you! I would also say that this leads to the conclusion that market participants are all in. So not much upside in most asset classes.Although for most people, and market commentators it still the question 'when will interest rates come down again' instead if 'will interest rates come down'
I think people think they are hedged... when they are not really. Everything has become one trade
I think this is quite perceptive, but perhaps should not be surprising. given Trump's efforts to reshape the entire global economic/monetary framework, other than gold, I expect it will be a while before something is seen as safe again
I think this is the most important piece you’ve written maybe ever?
Thank you
very Interesting take, thanks for sharing!
30yrs of carry trade needs reversing….Only risk free asset becomes Gold
Or maybe just cash...
That's like a thought that Felix Zulauf has had. It's a time not to make money. It could be a time just to lose less than others. I dont think many investors or retirees want to think about that.
What are the “circumstances” under which cash is an effective option in a double-digit inflation scenario? I suppose it could be considered the “least bad” option. Or maybe it’s a matter of “time frame” and cash could work in the short-term.
Its a really good question. So cash at the moment does give you 4%... alot of people hate cash... especially if you are of the view that markets always go up... I feel its more least bad option at the moment. I think politics is trying to reduce income inequality, so just maintaining wealth in nominal terms is a win
Thank you!
Macro hedgefunds did allright so far this year. At least the ones I follow.
Have they? Always hard to tell.... only the ones doing well ever tell you!