As I sit here in Cafayate, surrounded by sumptuous beauty and enjoying a slower pace, I find myself reflecting on the magnitude of the human economic endeavor and our search for a path to sustainable investing in a world where central bankers seem hell-bent on changing the very nature of the medium of exchange. All in the name of helping us, to be sure, with the most positive of intentions; but if you are a retired person living on your lifetime of accumulated savings, you might be wishing for a little less of what they call help and a little boost to interest rates, to help you afford a safe and pleasant retirement.
In this contemplative mode, I received a brief essay from one of my favorite thinkers, Dylan Grice, who has left the labyrinthine halls of Societe Generale to work with Edelweiss Holdings. This is a move I applaud, as I expect it will enrich us all by making his writings more accessible. He is a thinker of the very highest order and someone I go out of my way to spend time with. I am being somewhat presumptive in sending to you a portion of his inaugural appearance in Edelweiss Journal, but I don’t think he will mind. (I am under a deadline, and he is appropriately focused elsewhere at the moment.)
Let me preview his work with this one paragraph, where he talks about that most precious of commodities, trust, and its relationship to central banks:
Of the many elemental flaws in macroeconomic practice is the true observation that the economic variables in which we might be most interested happen to be those which lend themselves least to measurement. Th us, the statistics which we take for granted and band around freely with each other measuring such ostensibly simple concepts as inflation, wealth, capital and debt, in fact involve all sorts of hidden assumptions, short-cuts and qualifications. So many, indeed, as to render reliance on them without respect for their limitations a very dangerous thing to do. As an example, consider the damage caused by banks to themselves and others by mistaking price volatility (measurable) with risk (unmeasurable). Yet faith in false precision seems to us to be one of the many imperfections our species is cursed with.
For those who are interested, his website is http://www.edelweissjournal.com/.
I have been seriously off the grid for a few days, up in the Andes at Bill Bonner’s hacienda, which is in as remote a place as I have ever visited. Using the term road in conjunction with getting there does not quite convey the reality. Animal paths, dry riverbeds (where we got stuck in the sand), rock-strewn trails, overhangs, gorges, and river crossings (where we once again had to be towed when we did not make it all the way across), flat tires, wrong turns on unmarked tracks leading to canyons of immense beauty but not exactly on our map. During the rainy season his place is completely inaccessible; but oh dear gods, when we arrived it was to a beauty and serenity seemingly out of place and time.
Then it was all about wood stoves, cold showers, and power for just a few hours a day, but also much laughter and thought-fueled conversation with Bill, Doug Casey, David Galland, and a few others. It is a working cattle ranch (Doug Casey calls them sand-fed beef, but there did seem to be pastures here and there), with high-altitude vineyards producing wines that Parker has rated at 93. I rode a horse and managed to not fall off, although there were a few moments when I wasn’t sure who was more scared, me or the horse.
Bill lives there a few months a year, and until I got there I did not understand the attraction. If he allows me, I will return next year, but with a more appropriate vehicle for the “roads.”
As I sat beneath the most star-filled sky I have ever gazed upon (and I have taken in a few remote and lightless vistas), I took time to reflect on what a remarkable life I have been blessed to lead these last few years. Never in my dreams did I foresee this path. It is not just the places I go, it’s the people I meet everywhere, who invest in my own limited understanding and meager insights. What a fascinating world and time in which we find ourselves. I wake up every day hoping to continue the journey a little longer, thinking about our collective economic path and writing to you of what I learn.
Now, let’s enjoy thinking with Dylan. (And I am off to the gym and then back to my book writing!) If you have not registered to come to my Strategic Investment Conference, May 1-3, you need to do so now. I hope we will create a time and place where you can gather your own insights and have some learning moments. This will be the best conference we have ever done.
Your thinking about the future of work analyst,
John Mauldin, Editor
Outside the Box
Would the Real Peter and Paul Please Stand Up?
By Dylan Grice
In a previous life as a London-based ‘global strategist’ (I was never sure what that was) I was known as someone who was worried by QE and more generally, about the willingness of our central bankers to play games with something which I didn’t think they fully understand: money. This may be a strange, even presumptuous thing to say. Surely…