Saturday, April 18, 2015

Economy Chat

Author Jim Rickards - my preferred source for economic analysis - talks with Hedgeye TV CEO Keith McCullough.  If you have an hour fifteen, this is a good use of your time.

In this interview (posted in mid-March), Jim talks about his CIA work, QE, debt-invoked default, the "knife-edge of serious deflation and hyper-inflation," how the Commerce Dept. distorts quarterly growth rates, Greece, China, interest rates, his philosophy on predicting market moves and more.

McCullough (17:57 mark):
Are people so insecure about what they do in this profession [finance] that all they have left is to try and find something to cling to certainty at this point when they should be doing absolutely none of it?
The answer is yes.

Rickards (55:14 mark) speaking about how Warren Buffet is best prepared against both deflation and inflation:
So Buffet has got all those inflation hedges [hard assets like Burlington Northern], but he has $55 billion in cash, the most cash Berkshire Hathaway has ever had.  That is the most cash they've ever had.  What does it give them?  All those things I said: it reduces volatility and is a deflation hedge.  So Buffet has got his inflation hedge in hard assets, he's got his deflation hedge in his cash.  He's got his optionality so he can pounce when things get in distress.  So he's my portfolio with six more zeros.

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