“A growing number of investors are recognising the potential of gold to increase returns and improve risk-mitigation attributes of well-diversified portfolios.”
Mohamed El-Erian is Chairman of The White House Global Development Council, Chief Economist at global insurer Allianz, one of the the world’s premier bond investment firms and a leading commentator and author on investing, economics and finance.
Simon Baptist, Chief Economist for the Economist Intelligence Unit raises the question whether we are seeing first signs of a return to inflation in a Twitter posting on @baptist_simon with a link to his current Newsletter headlined The Return of Inflation where he writes:
…”1 Chinese Factory Gate prices ended their near five year run of declines, while in the UK producer price inflation reached a five year high of 1.2%. In bad news for UK firms producer input prices rose by an astonishing 7.2% implying a huge compression in average profit margins – and significant consumer price inflation (or bankruptcies) to come.”
Commenting on the latest UK inflation figures Dr Andrew Sentance,senior economic adviser at PwC, and former Bank of England Monetary Policy Committee member said:
“Inflation has risen to 1.0 percent this month, as expected. Higher import prices are feeding through to consumers because of the fall in sterling since the EU referendum vote. This latest rise, however, is just the tip of the inflationary iceberg which is coming our way. Since the beginning of September, sterling has fallen a further 8 percent or so against the euro and the dollar. This will continue to push up inflation in the months ahead. A stronger oil price will add further to price rises for energy and transport.
“Over the course of next year, we should expect inflation to rise above the Bank of England’s 2 percent target. This will squeeze household spending power and add to the slowdown in the economy in 2017. PwC is forecasting a slowdown in growth to around 1% next year, with investment cutbacks reinforcing the slowdown in consumer spending.”
The 2016 winners of the prestigious Mining Journal’s best America’s based Fund Manager Award are Goldwatcher co author Frank Holmes , Chief Executive and Investment officer of US Global Investments/US Funds with the Fund’s portfolio manager Ralph Aldis CFA The award was decided based on fund metrics provided by Morningstar.
Updating his long standing advice to investors to “anticipate before you participate” Holmes quotes Marcus du Sautoy, Professor of Mathematics at the University of Oxford : “Although the world looks messy and chaotic, if you translate it into the world of numbers and shapes, patterns emerge and you start to understand why things are the way they are.”
The mantra for this blog is Information + Simple Arithmetic = Common Sense. Holmes explains why.
Keynes on The Economic Consequences of the Peace:
“Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.
“By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth.”
Chart £ – $
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