Outside of being a significant public health crisis, Covid-19 exposed some of the long-term problems associated with fiat currencies and seemingly unlimited monetary stimulus. The recovery from the global financial crisis came and went, yet the economic reliance on central bank support never ceased. As global debt reaches record high levels and ever more fiat is printed, investors are increasingly turning to verifiably scarce assets to hedge against the worst-case scenario.
Get The Full Henry Singleton Series in PDF
Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues
Q4 2020 hedge fund letters, conferences and more
Fiscal And Monetary Stimulus
Governments and central banks responded to Covid-19 with unprecedented amounts of fiscal and monetary stimulus. Japan, for example, launched a fiscal stimulus package of 45% of GDP. Most developed countries ended up with fiscal support of around 20% of GDP while developing economies were closer to 10% due to high interest rates and little financial room for manoeuvre.
In his 2014 letter preview, Buffett states that, far from being a weak choice, indexing can often achieve investor's goals far more easily than complicated picking strategies. This is a special guest post by Robert R. Johnson, Ph.D., CFA, CAIA. He is a full professor of finance at the Heider College of Business at Creighton
