ZIRP Dark Thirty

7 Apr

The recent de-classification of information regarding Osama Bin Laden sheds some light on his investment philosophy. These documents showed Bin Laden firmly in charge of the directives regarding the allocation of a $5MM ransom. Bin Laden  allegedly gave instructions to divert a large portion of those funds to gold. He reportedly commented on the historical price action of the yellow metal and its future appreciation potential. Clearly, he was interested in the portability of the metal, but he was most likely also intent on avoiding the problems associated with holding dollars.

Fast forward six years and one can only surmise that the rise in the gold price to date is not wholly unrelated to the negative rates that exist across a number of sovereign government bond curves. It is not our intention to equate the war on terror with the war on wealth, but the aforementioned negative rates are the direct equivalent of a CIA confiscation.

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