The world is turning. One of NZ’s more rational investment advisers is delivering a presentation this Friday on the subject "Gold is Money and Nothing Else."
That is exactly what JP Morgan himself said when he was asked about the role of gold in the financial system by a US congressional subcommittee in 1913. Modern investment portfolio managers may soon come to realise they have been imprudent to continue to ignore gold as a currency. Real wealth is, after all, already shifting rapidly and inevitably away from the West and into the East. That's because the United States has by now irreparably abused its "exorbitant privilege" (as it was once called by Charles De Gaulle) of US dollar hegemony (which was the result of Bretton Woods in 1944).
Indeed, ever since the US defaulted on its debt obligation in 1971, when President Nixon unilaterally cancelled the Bretton Woods system and stopped the direct convertibility of the US dollar to gold, the world has continued to be under the spell of central bankers. Yet now, after years of irresponsible money creation, the global financial system is in serious trouble. Throwing more money at the problem will not work forever. There is no way to perpetuate a debt-based financial system in perpetuity. Rien ne se perd, rien ne se crée; tout se transforme. The ongoing transformation is yet again taking its natural course. One manifestation of this is the increasing importance of Sovereign Wealth Funds. Will central banks survive?
This presentation aims to debunk the myth that the gold standard is a barbarous relic and show that, instead, we are in need of serious monetary reform and, in the meantime, gold has once again a very real role to play in the prudent management of wealth.
This is a major presentation by a respected professional, who has been delivering this presentation round Asia, and will want to give feedback on the reaction (ie that there’s an urgent need for monetary reform and until this happens it’s prudent to look at investments in that context.)
Louis Boulanger is the founder of LB Now Ltd, and was previously executive director of Mercer Investment Consulting, where he was responsible for the strategic asset allocation advice given to institutional clients. He also served as founding president of the CFA Society of New Zealand and remains a director. He is currently the chair of the Asia Pacific Regional Investment Performance Subcommittee of the Global Investment Performance Standards (GIPS) Council and a member of the GIPS Executive Committee.
The talk is that this Friday lunchtime at Auckland’s Northern Club. Details here.