Back in the 1970's libertarian economist Harry Browne proposed what he termed the Permanent Portfolio. This was driven in part by recency bias in experiencing high inflation, high and rising interest rates and tight energy supply. The portfolio was quite simple, 1/4 Treasury Bonds, 1/4 Treasury Bills, 1/4 S&P 500 and 1/4 Gold Bullion. Wall Street launched a mutual fund in 1982 employing his strategy. Of course, with the benefit of hindsight, this was the absolute worst time to invest in such a fund. But, in the period of 2000-2010 the fund had a cumulative return of 153.39% vs -9.88% for the Vanguard 500. My thinking is that we are in or near another period where the Permanent Portfolio may outperform the S&P again.
The remarks from Trump on Bitcoin are in line with the scrapping of the Laissez Faire philosophy (added to the dial back in globalization that had already started with the friend-shoring). On top of the fiscal dominance it seems both these trends will lead to higher inflation and possibly more misallocation of Capital
I agree. It is surely more than a coincidence that many Western countries face increased immigration, which has become a political issue yet never seems to be solved.
"ageing populations may require higher taxation levels to afford greater health and social care, and, at the same time, they may lead on to high street price deflation, if traditional spending slows."
Some countries like US, UK, France or Spain are solving this issue through immigration (big population increase since 2000 -> 18% in the US from 2000 to 2022). If the trend continues it would imply more activity + tax collection without higher individual real taxation
They typically outperform as economic cycle picks up. With rates having being held high for some long time small cap will have been hurt and this is being reflected in softer economy. So rate cuts should certainly help o/p
Back in the 1970's libertarian economist Harry Browne proposed what he termed the Permanent Portfolio. This was driven in part by recency bias in experiencing high inflation, high and rising interest rates and tight energy supply. The portfolio was quite simple, 1/4 Treasury Bonds, 1/4 Treasury Bills, 1/4 S&P 500 and 1/4 Gold Bullion. Wall Street launched a mutual fund in 1982 employing his strategy. Of course, with the benefit of hindsight, this was the absolute worst time to invest in such a fund. But, in the period of 2000-2010 the fund had a cumulative return of 153.39% vs -9.88% for the Vanguard 500. My thinking is that we are in or near another period where the Permanent Portfolio may outperform the S&P again.
I agree
Wealth taxes and exit taxes are becoming an increasing concern for some
Spain has a wealth tax on global liquid assets above 500 euros
Apparently USA has an exit tax if decide to give up USA citizenship to escape the IRS and having to file in USA every year even though live elsewhere
Michael mentioned the demographic factor
USA and Canada trying to adjust that by bringing massive percent of immigrants as percent of population both legal and undocumented
Who knows how many undocumented in USA could be over 20 million people?
Are about 73 million baby boomers
Hi David
I am spanish and I can tell you the wealth tax as you say does not exists
There is a wealth tax for over 1 million € in assets excluding your primary house. 2 million € if you are married (also excluding your primary house)
And in many regions in Spain you don't have to pay it because some Regional Governments offer a 100% allowance
Here are 2 links with the details:
https://www.pellicerheredia.com/en/wealth-tax-spain/
https://www.andalucia.com/law/wealthtax.htm
If you are in Spain and paying it. Beware
Oh ok that YouTube video was not correct then
Lots of YouTube influencers now talking about living in other countries
She said global liquid assets over 500 EUROS would be taxed
Thanks for the clarification
500k euros lol
Hi Michael
Congratulations on your reading of the world
The remarks from Trump on Bitcoin are in line with the scrapping of the Laissez Faire philosophy (added to the dial back in globalization that had already started with the friend-shoring). On top of the fiscal dominance it seems both these trends will lead to higher inflation and possibly more misallocation of Capital
Would you agree?
What past period is similar to the current one?
How did it end?
https://x.com/jurabilis/status/1817461798435442943?t=mhf4sxgD3ABz4sha6jqa0A&s=08
I’m 100% MSTR allocation
I agree. It is surely more than a coincidence that many Western countries face increased immigration, which has become a political issue yet never seems to be solved.
Hi Michael
"ageing populations may require higher taxation levels to afford greater health and social care, and, at the same time, they may lead on to high street price deflation, if traditional spending slows."
Some countries like US, UK, France or Spain are solving this issue through immigration (big population increase since 2000 -> 18% in the US from 2000 to 2022). If the trend continues it would imply more activity + tax collection without higher individual real taxation
What do you think?
Worryingly you could be right. I figure many governments are passively following this course
They typically outperform as economic cycle picks up. With rates having being held high for some long time small cap will have been hurt and this is being reflected in softer economy. So rate cuts should certainly help o/p
ZIRP for the USA? Boom then bust?
hi Michael, what is your opinion about the recent strengthening of the Yen vs dollar? Thanks
Michael, really good remainder about Monetary Dominance
what is your thoughts on upcoming QRA?
Some legislation will be impactful
Apparently Newsom etc can treat homeless people as criminals
But then what does he do? Put them in jail at 45k per year USD of taxpayers expense? Bus them to another state?
Exile them to Somalia?
Kill them?
Seems not well thought out
America is projected to have 40 million homeless that’s my back of envelope calculation
Some 90 percent of Americans have no money and as you age will be hard to find work
Political instability another aspect
I am doing 70 stocks 30 bonds right now
Will see how goes
Hi Michael,
Appreciate for the good work.
Do you expect small caps to outperform with respect to cuttings cycles ?
Best Regards