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Need Safe havens: CHF or Gold?

A warped manifestation of the fear and greed trade-off that used to characterize investor behavior has developed, according to Bloomberg’s Richard Breslow. Asset managers are exhibiting the manic depressive drive to simultaneously throw caution to the wind, ignoring all risk metrics while plaintively bemoaning the lack of safe havens.


S&P 500, 2016 EPS Expectations

Fear and greed was a continuum, allowing for an ebb and flow with continuous price discovery and availability. What we have now is pedal to the metal front-running of central banks and the nagging fear that when the fun ends there won’t be a bid anyway, so why bother being prudent.

S&P 500, 2016 EPS Expectations

In times of negative interest rates and falling earnings per share, gold is the ultimate safe haven. Due to negative rates, it is not the Swiss Franc. - Click to enlarge

 

 

A big part of this problem is investors have fooled themselves into believing there are desperately few viable answers to, “where else is there to invest?”

Switzerland has always been the go-to option, but they’ve lost tolerance for hot money. Negative rates, too.

 

The train wreck that’s Japan really only works if you’re Japanese. And no one can be sure what they’ll look like at the end of this tunnel.


Gold is the capitulation choice.

Performance since December 2015

Fed Rate Hike

In times of negative interest rates and falling earnings per share, gold is the ultimate safe haven. Due to negative rates, it is not the Swiss Franc. - Click to enlarge

There are good alternatives right under our noses, or in the case of the U.S., right above our heads, that deserve a lot more consideration.

O Canada, where have you been all of my life?

 

Stable, democratic government with a popular premier. A real fiscal policy that’s beginning to be implemented. Stable monetary policy. A yield curve that has positive rates over its entire length.

 

Too much reliance on energy, but oil’s looking pretty healthy on the charts, folks. As is the Canadian dollar, now back through 1.30.

 

Throw in a solid banking system, freely tradable markets and no capital controls in or out. Hint, hint, look who are the buyers of Vancouver real estate.

In truth, there are plenty of prudent places to invest if you look in the right places. And countries doing sensible things, too

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Tyler Durden
ZeroHedges' Tyler Durden is the hero of Fight Club, the 1999 movie based on Chuck Palahniuk's novel that reflected Chuck's experience in the Cacophony Society Quote: "Goddamn it, an entire generation pumping gas, waiting tables, slaves with white collars. Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don’t need. We’re the middle children of history, man. No purpose or place. We have no Great War. No Great Depression. Our Great War’s a spiritual war… our Great Depression is our lives. We’ve all been raised on television to believe that one day we’d all be millionaires, and movie gods, and rock stars. But we won’t. And we’re slowly learning that fact. And we’re very, very pissed off." --> see more about Tyler on snbchf
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