Going for Gold

It has been really busy. The call on Russian equities is working really well. Meanwhile, I have invested in gold miners. No, I am no gold bug. I am not a believer in hyper-inflation either. Yet, I think gold will prove to be a good investment over the next few years.

My reason is simple. The economic outlook that we face is fat-tailed. The private sector sector delevering underway is creating deflationary headwinds. The authorities are countering that by spending and keeping interest rates low for long; leading to long-term inflationary concerns.

The fat tailed economic outlook creates a skew in the expected inflation distribution. Democratic governments will go for inflation if pushed to the corner. And, that's all you need for gold to go up.