Alpha returns are likely to go to those investors who orientate their portfolios towards the embryonic (riskier) stage of the fourth industrial revolution which is bringing together digital, physical and biological systems. The fourth industrial revolution (like every revolution before it) will be a game changer. For those of you who have the foresight and the means to start investing early in the fourth industrial revolution, the...
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Price level targeting could become the central bank’s novel (some say riskier) policy posture which could be used to set the future level of money supply. If so, it could mean greater volatility in the future rate of US inflation and unemployment going forward. Former Fed chair Ben Bernanke is putting the cat amongst the pigeons (or at the very least testing the water) with his most recent blog, entitled Temporary price-level...
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The worst case-best case scenario analysis gives forecasters some kind of hedging when they are trying to predict the future. But traders, investors, and hedge fund managers spend their entire working life buying or selling assets at the current market price because they believe that the future price will move in their favor. In short, they are all trying to live today in the future. Forecasting the future is a “mug’s game”,...
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The fallout of excessive debt is in play and the thin veil of a democracy is beginning to reveal its imperfections. “If you want a picture of the future, imagine a boot stamping on a human face,” George Orwell A Final Warning When the right to peaceful assembly, freedom of expression, voting is made illegal when these basic human rights are suppressed (with state-sponsored violence against its own people) then that state is no longer...
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Standby for the central bank’s great Unwind. Eight years on from the worst financial crisis in living memory the main western central banks, the Fed, BoE and the ECB are now singing the same tune; they agree that the transition to monetary normalization has finally arrived. The major stock indexes are hovering at historic highs. Moreover, the CBOE Volatility Index is at a multi-year low at 9.59 This indicates no fear in the...
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