Tim Price: Transitioning From A Collapsing Currency
Tom welcomes Tim Price from Price Value Partners to the show. Tim argues that markets are completely irrational and central bankers are clueless. Bonds have become the enormous red-headed step-child of the markets. What happens with bonds affects every asset on the planet. Even the concept of interest rates at or below zero is completely extraordinary.
Ninety percent of those in finance today have no real understanding of what money is or its importance. The current money system doesn’t share any of the key characteristics of sound money.
There are three possible ways out of the debt problem but politicians always choose the inflation route because that’s where the political incentives align.
He is concerned about the possibility of a crack-up boom because that could result in messy high inflation. We had several major shocks in the 1970s which ended with all sorts of civil tensions, not unlike today.
The Repo market crisis of 20198 may have been far more serious than the Fed admitted.
He explains their approach to protecting wealth in this environment. One approach is utilizing trend following while looking for value. They try to balance their portfolio against risk.
Western economies are hyper financialized and most consider gold to be a product of a bygone era. People have lost touch with the source code of what is real money. Money today is an abstraction of an abstraction and gold is the one tangible form.
Crypto to an extent has grabbed the media limelight rather than gold.
It makes no sense to value gold in dollars if the dollar itself is not worth anything. There is no definition for the worth of a dollar. The gold rally will take off when gold finds new highs in every currency in the world.
Time Stamp References:
0:00 – Introduction
1:33 – Market Insanity
5:13 – Bonds & Rates
8:43 – Currency & Liberty
12:34 – Political Incentives
13:46 – Crack-Up Boom
15:09 – U.S. Zero Rates
19:08 – 2019 Repo Markets
20:34 – Navigating the Storm
27:06 – Misunderstood Gold
29:15 – Evaluating Miners
31:48 – Crypto Vs. Gold
33:30 – Gold Stability
34:30 – Drivers For Gold
41:20 – Investing Vs. Trading
42:29 – Wealth & Risk
48:08 – Permanent Portfolio
52:47 – Wrap Up
Talking Points From This Episode
- The current state of the equity and bond markets.
- Money, liberty, and measuring wealth against the dollar.
- Why gold’s function is largely misunderstood today.
- Balancing investments against risk.
His Book: https://www.amazon.ca/Investing-Through-Looking-Glass-Irrational/dp/0857195360
Tim Price has worked in the capital markets for over 30 years. A graduate of Christ Church, Oxford, he spent a decade as a bond specialist before going on to serve as Chief Investment Officer at three separate wealth management firms.
Tim has been shortlisted for five successive years in the UK Private Asset Managers Awards program and was a winner in 2005 in the category of Defensive Investing. He is now co-manager of the VT Price Value Portfolio, a fund investing in Benjamin Graham-style value stocks, and specialist value funds, from around the world. He also co-manages bespoke private client portfolios.
Tim writes for MoneyWeek Magazine and The Spectator, and his weekly commentaries are freely available at the Price Value Partners website.