September 26, 2025 • 14 mins
In this week’s Markets Wrap, hosts Merryn Somerset Webb and John Stepek weigh Greater Manchester mayor Andy Burnham’s bond-market remarks against fiscal reality, unpack financial services group Gavekal’s so-called “Turkish Portfolio” of equities, and consider gold’s role as a hedge in an increasingly crowded market.
As always, questions and comments welcome at merrynmoney@bloomberg.net
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News. Welcome to the Merrin
Talks Money and News round Up, where we talk about
the biggest moves in markets this week and what's driving them.
(00:24):
I'm Marren zumzet Webb, Senior editor at Bloomberg UK.
Speaker 2 (00:27):
Wealth, and I'm Joined Stavik, senior reporter and not that
of the I need distilled news later.
Speaker 3 (00:32):
You missed out award winning.
Speaker 2 (00:33):
Oh yeah, I'll opt read it next week.
Speaker 1 (00:37):
That's all right, okay, Just I want to be absolutely
sure you get all the credit I know you want
every week.
Speaker 2 (00:43):
I ceve it, I know.
Speaker 1 (00:45):
Right. Listen, there's a lot to talk about this week,
most of which we're not going to talk about. But
let's talk about this interview with Annie Burnham, who may
or may not one day be Prime Minister of the UK.
Speaker 3 (00:56):
And he talked about all sorts of things in it.
Speaker 1 (00:58):
But there are a couple of things that you and
I to hmm.
Speaker 2 (01:01):
Yeah. So this is his big interview in The New Statesman,
which for those listening outside the UK is a kind
of slightly left lean in UK political magazine. So the
Andy Burnham when the cover Nandy Burnham's currently the mayor
of Manchester, but he's hoping to be the leader of
the Labor Party in there for the Prime Minister. I'm
not at all interested in his exact route to get
in there, because it's the usual political stuff. But one
(01:24):
thing jumped out in this otherwise very softball interview, which
is at one point he says we've got to get
beyond this thing of being in Hawk to the bond markets.
That just leapt out at me, because the most obvious
way to get out of Hawk to the bond markets,
in other words, to not owe the bond markets money
is to stop spending as much money and to live
(01:46):
within our means. But elsewhere in the article, all he
talks about is how he's going to nationalize basically everything,
and that would cost money. So I'm just trying to
put two and two together. They make it sum side up,
and what I'm really coming not worth is this would
be even most for the public finances than the current situation.
But then, which at least has Rachel Reeves grappling with
(02:10):
the notion that the bond market matters and that her
fiscal discipline matters, even if I don't think she's going
about that the great way.
Speaker 1 (02:19):
Yeah, I mean, it's an interesting one, isn't it, because
that very common. We've got to get out of this,
this idea that we are in hockdaw controlled by the
bond market.
Speaker 3 (02:26):
It's not an idea. It's not an.
Speaker 1 (02:27):
Idea, it's a reality. You can't think yourself out of
being controlled by the bond model. If you you know,
if your debt levels are too high, you are controlled
by the bond market.
Speaker 3 (02:38):
That's just the way it works. And as you say,
the only way.
Speaker 1 (02:41):
Out of that is to get that debt down, or
the very least get that deficit down so that the
markets trust.
Speaker 3 (02:47):
You know. We're not going to go on about this
at length, although we could or were really.
Speaker 1 (02:51):
Good because we've got a podcast coming on this on
Monday that I strongly recommend you or listen to it.
It's a little bit scary, so nice cup of tea
before you start, but do listen on Monday.
Speaker 3 (03:01):
It's it's a very.
Speaker 1 (03:03):
Interesting perspective on where the UK might be going next financially.
Speaker 3 (03:08):
At least it is great. I mean it's gary but great.
And also politics.
Speaker 1 (03:13):
There's a little bit of Andy and there Andy Byrnham,
not Home in particular, but how we might get to
the point where there might be an opportunity for him
to show us more of his wares. Can't wait, Oh goody,
right right, So while we're on the matter of crisis,
what I want to talk about today, All I want
to tell you about a little bit is a note
(03:34):
that's just come out from gav Cal Research, and it's
a piece written by Charles Gavin. It's called a Turkish
portfolio for France. And he hasn't put in brackets, but
he could put in brackets and everywhere else. So what
we want to ask is what is a Turkish portfolio?
It sounds sounds like a ethhmism, and actually kind of is.
While Charles says, is it in any country when you invest,
(03:57):
you effectively have a choice between four domestic asset classes.
You can invest in shares, you can invest in gold,
you can invest in bonds, or you can invent in cash.
So we're going to put a bit quite lot and
all that aside for one moment. That's just stick with
trad got those four things. Now, if the local currency
is worthless or heading in that direction, you expect very
(04:20):
high inflation or huge political instability or whatever it is,
then bonds and cash, they don't have any real value
in that currency. And if that is the case, if
your government is following a policy that structurally debases the
value of the national currency, I don't know who that
could be, who might be doing that, but let's say
your government is following that kind of policy, then you
can't possibly diversify dimest domestically into bonds in cash.
Speaker 3 (04:43):
All you can do.
Speaker 1 (04:45):
Is hold a portfolio made up of fifty percent of
shares and fifty percent of gold, which is what he
calls a Turkish portfolio, because you could call it an
Argentinian portfolio or something like that. And in future it
may be that we call it a French portfolio or
a even a British portfolio.
Speaker 3 (05:01):
I don't know, but you know, the euphemisms might just
keep rolling.
Speaker 1 (05:05):
And one of the reasons that he writes about this
is because he says, look at the social democratic model,
or perhaps what we might call the kleptocratic model. It
is collapsing in France very fast. It's beginning to collapse
in the UK heading in the same direction in Germany,
and in the US, of course, guns and butter, guns
and butter blah blah. One of our our collegue, John
Authors has written in Great Guns and Butter opinion piece
(05:26):
do you read that have led to a fiscal situation,
which Charles says is quote making me very nervous. Indeed,
and he says rational investors should therefore adopt Turkish portfolios
in France, in the UK, in Germany and in the US.
Speaker 2 (05:42):
Wow. So we yes, So he doesn't just single fine
does Okay?
Speaker 3 (05:47):
He goes right for us to write for us too.
Speaker 2 (05:50):
I like that we spoil up the icy classies there,
because that's how I spoil up aid classes. I think
if you're thinking about your act allocation, you say equities, borns,
golden cash, and you know all the other bits are
subsets of those things. Yes, So I mean I agree
with him on that, and it's also hard to disagree
with I mean, really, he's just making a distinction between
real assets and financial assets. I know he kind of
(06:13):
calls them kind of contractual as it's doesn't he something
like that? Yeah? And it I mean obviously I think
I wouldn't. I wouldn't be comfortable saying have half your
portfolio and golden half your portfolio and equities. But I
do take his point and I suppose the only thing,
(06:34):
the one thing that I don't know, and I don't
know about you, but my sort of contrarian tingle in
my brain keeps on saying points have got to be
a bye again at some point. It's not saying that
very strongly, but I can't help but feel that we
will reach a crisis point rather than societal collapse. I mean,
(06:58):
I don't think that's what we'll get. A think we'll
get a toundon point, much like the end of the
nineteen seventies, and at that point it will probably be
a good team, you know, invest in points, but we
could be quite away from.
Speaker 3 (07:09):
That, I think. I mean, you're you're not alone there
in that, you know.
Speaker 1 (07:12):
I've spoken to several people recently who are quite bullish
on UK guilts, but I find that quite difficult. Right now.
Speaker 3 (07:19):
It feels to me like we've got a bit more of.
Speaker 1 (07:22):
This cycle to go through before we hit a point
where the current government or the government that replaces it
genuinely understands that running the equivalent of a six seven
eight percent deficit in the UK, which is where we're
likely to end up this year if we don't put
ourselves together again. I refer you to Monday's podcast please listen.
Is not sustainable and that something has to change. Whether
(07:44):
you want it to or not, whether you feel it's
kind or moral or not, something still has to change.
Speaker 3 (07:50):
I feel we're a way of that. So I'm still
looking at and going Turkish portfolio. Yeah, we could do that.
Speaker 2 (07:57):
I mean I wish that's half my portfolio and gold rate.
Speaker 1 (08:00):
Yeah yeah, half in the nasdak and half of the
nasdak and half in gold for the last decade. If
anyone has done that and is therefore roaringly rich as
a result, please do get in touch, let us know
about it and tell you why why you decided to
do that.
Speaker 3 (08:14):
It would be fascinating.
Speaker 1 (08:15):
But John, that brings us back to the gold price, right, yeah,
I mean, at what point do you look at this
and go this is overbought or do you just look
at it and go, well, Actually, if everyone's going to
get a Turkish portfolio or a French portfolio, whatever we're
going to call it these days, there is a.
Speaker 3 (08:28):
Long way to go.
Speaker 2 (08:29):
But in the past, gold bill markets and quite often, honestly,
I just started to think about these things about like
what should have got telling you and then what was
it wrong about last time? Because the instinct sort of
starts to kick in, and so there's a little bit
in the nervousness there. But in my mind that kind
of historically means that's probably quite a long way to go. Yeah,
And also at a micro level, I mean, I think
(08:52):
the thing that presumably would stop the gold bill market
for good would be a return to some sort of
fiscal discipline, and specifically in the US. I am not
one hundred percent rolling that out because a lot of
people have got such bad Trump derangement syndrome that they
can't see that anything that he does will ever turn
out well. And actually, in many ways he is actually
(09:14):
raising money in unorthodox ways. That said, I do think
that he also would like to see you inflation running
at three to four percent for a while. He'd like
it interest rates to being much lower. So I don't
think that, you know, fiscal discipline is going to return
anytime soon. And while that's the case, and also while
(09:35):
other countries want to get out from under the US
dollar system, it's hard to see why gold would you know,
turn around and quit.
Speaker 1 (09:44):
Really Okay, So John's gold bull, Everyone's gold bull.
Speaker 2 (09:49):
Yeah, well that's the problem. It does feel like that too.
Speaker 1 (09:52):
You are a resident contrarian. How does that fit anyway?
Speaker 2 (09:56):
He used to be?
Speaker 1 (09:56):
For the last decade, we've been able to sit there.
You and I am one of the effectively in a
gold gold market and the contrariant inside a bull market,
which is very unusual position to be in. Right, Yeah,
but that that fail is beginning to change now everyone's
all over. God.
Speaker 3 (10:10):
I was listening to radio yesterday morning.
Speaker 1 (10:12):
I think I said to you the other day, and
there it was long chat a bad gold at prime time?
Speaker 2 (10:16):
That was times low, wasn't it. That wasn't Radio four, No,
it wasn't. I see. Look, honestly, at this point, I'm
sort of looking for either an economist cover, which would
be I think a first ever. I don't think the
economist has ever had golden it's covered not in my
kind of time of being an adult, or maybe something
like you know, a program on the Today program talking
(10:37):
about or something like that. I mean also because I
mean it, I was looking at the gold mine and
ETF and it has doubled in the year today, and okay,
it was undervalued relative to gold for death, and it's
playing catch up. But at the same time, like anytime
an asset doubles in a year and it's not a cryptocurrency,
you've got to sit down and start thing and they will.
(11:00):
How much more exhibierance can get into this. And yeah,
at the same time, I don't feel that it's it's
not a kind of you know, twenty eleven levels yet
and that we did get kind of cover stories and
ATMs ditional gold and things like that at that point.
So I guess that's where I am. But you're right,
(11:22):
all of the models that people who are actually quite
good at analyzing gold have built over the last you know,
twenty our years all suggest that it's actually really very overvalued.
It's not as overvalued as it has been at some
points in the past, but it's certainly not cheap.
Speaker 1 (11:37):
But then I think you could also say, and we'll
finish with this, we could also say that those models
do not take account of possible fiscal breakdown no which
there is a non zero, non zero possibility of full
fiscal breakdown across much of the West. Very hard to
get that into a model, very very hard. When you're
looking at a model for the price of gold, you're
comparing it to the market cap of stock market, So
(11:59):
you're comparing it to history. You're comparing it to where
it moved in this crisis or that this crisis. But
it's very hard to input into your model what happens
when the majority of the West has a debt to
GDP level of one hundred or one hundred plus.
Speaker 3 (12:15):
How did you get that into a model.
Speaker 2 (12:17):
It's proper tail risk stuff. And obviously the actual history
of gold does not go back that far. It's only
been three flooring since the nineteen seventies, so I'm not
you know, it's very hard to see, like, well, what
would the gold place have actually been during World War Two,
which was the last time everyone had dated GDPD issue
was at like over one hundred percent.
Speaker 3 (12:38):
Yeah, but that didn't count.
Speaker 1 (12:39):
That didn't count because everyone also had plans to bring
that level down by you know, not being a war anymore, right, Hello,
peace dividend.
Speaker 3 (12:48):
We have nothing like that anymore.
Speaker 1 (12:49):
There is no plan to bring down the vast cost
of the welfare state by not having a welfare state anymore.
I mean, that doesn't exist. So we cannot even begin
to compare the level of debt we have now with
the level of debt that we have post war.
Speaker 3 (13:00):
Don't get me started. I mean, I do remember that the.
Speaker 1 (13:04):
Wonderful phrase that Russell Napier always used to use, that
you know, we built up the debt in wartime, that
it was built up by killing people, and if you
stop killing people, suddenly you don't ever spend so much money.
And now we built up our debt by keeping people alive,
and was certainly not going to stop doing that.
Speaker 3 (13:21):
So where do you go from here?
Speaker 2 (13:22):
I'd quivered, we're keeping people alive, But that's a that's
a different that's a definite issue.
Speaker 3 (13:28):
I think we had better end up bedge on anything
else we need to add.
Speaker 2 (13:31):
I don't think so. I mean, I think if you're
wanted to be called the one thing I would see
is just think about what your ass allocation was where
it's no sail it down to your ass allocations. But
I'll be honest, I'm not rebalancing. Just know, I'm just saying,
if you're nervous, you know, sailed down the sleeping point,
as the old Wall Street gays used to see.
Speaker 1 (13:52):
Okay, thank you, John, and we're also pleased to know
that you're not selling down. I'm not going to ask
you about a bitcoin account. Thanks for listening to this
week's Maron Talks Money Debrief. If you like us, show, rate, review,
and subscribe wherever you listen to podcasts. I keep sending
questions or comments the Mirror Money at Bloomberg dot net.
I hope you enjoyed the pod we did the other
(14:12):
day answering your questions, do send more. You can also
follow me and John entreprenter or x I'm at merin
sw and John is John Underscore Stepic. This episode was
hosted by me Maren Thumbsup web As, produced by Summersidi
and Moses and
Bloomberg Audio Studios, Podcasts, Radio News. Welcome to the Merrin
Talks Money and News round Up, where we talk about
the biggest moves in markets this week and what's driving them.
(00:24):
I'm Marren zumzet Webb, Senior editor at Bloomberg UK.
Speaker 2 (00:27):
Wealth, and I'm Joined Stavik, senior reporter and not that
of the I need distilled news later.
Speaker 3 (00:32):
You missed out award winning.
Speaker 2 (00:33):
Oh yeah, I'll opt read it next week.
Speaker 1 (00:37):
That's all right, okay, Just I want to be absolutely
sure you get all the credit I know you want
every week.
Speaker 2 (00:43):
I ceve it, I know.
Speaker 1 (00:45):
Right. Listen, there's a lot to talk about this week,
most of which we're not going to talk about. But
let's talk about this interview with Annie Burnham, who may
or may not one day be Prime Minister of the UK.
Speaker 3 (00:56):
And he talked about all sorts of things in it.
Speaker 1 (00:58):
But there are a couple of things that you and
I to hmm.
Speaker 2 (01:01):
Yeah. So this is his big interview in The New Statesman,
which for those listening outside the UK is a kind
of slightly left lean in UK political magazine. So the
Andy Burnham when the cover Nandy Burnham's currently the mayor
of Manchester, but he's hoping to be the leader of
the Labor Party in there for the Prime Minister. I'm
not at all interested in his exact route to get
in there, because it's the usual political stuff. But one
(01:24):
thing jumped out in this otherwise very softball interview, which
is at one point he says we've got to get
beyond this thing of being in Hawk to the bond markets.
That just leapt out at me, because the most obvious
way to get out of Hawk to the bond markets,
in other words, to not owe the bond markets money
is to stop spending as much money and to live
(01:46):
within our means. But elsewhere in the article, all he
talks about is how he's going to nationalize basically everything,
and that would cost money. So I'm just trying to
put two and two together. They make it sum side up,
and what I'm really coming not worth is this would
be even most for the public finances than the current situation.
But then, which at least has Rachel Reeves grappling with
(02:10):
the notion that the bond market matters and that her
fiscal discipline matters, even if I don't think she's going
about that the great way.
Speaker 1 (02:19):
Yeah, I mean, it's an interesting one, isn't it, because
that very common. We've got to get out of this,
this idea that we are in hockdaw controlled by the
bond market.
Speaker 3 (02:26):
It's not an idea. It's not an.
Speaker 1 (02:27):
Idea, it's a reality. You can't think yourself out of
being controlled by the bond model. If you you know,
if your debt levels are too high, you are controlled
by the bond market.
Speaker 3 (02:38):
That's just the way it works. And as you say,
the only way.
Speaker 1 (02:41):
Out of that is to get that debt down, or
the very least get that deficit down so that the
markets trust.
Speaker 3 (02:47):
You know. We're not going to go on about this
at length, although we could or were really.
Speaker 1 (02:51):
Good because we've got a podcast coming on this on
Monday that I strongly recommend you or listen to it.
It's a little bit scary, so nice cup of tea
before you start, but do listen on Monday.
Speaker 3 (03:01):
It's it's a very.
Speaker 1 (03:03):
Interesting perspective on where the UK might be going next financially.
Speaker 3 (03:08):
At least it is great. I mean it's gary but great.
And also politics.
Speaker 1 (03:13):
There's a little bit of Andy and there Andy Byrnham,
not Home in particular, but how we might get to
the point where there might be an opportunity for him
to show us more of his wares. Can't wait, Oh goody,
right right, So while we're on the matter of crisis,
what I want to talk about today, All I want
to tell you about a little bit is a note
(03:34):
that's just come out from gav Cal Research, and it's
a piece written by Charles Gavin. It's called a Turkish
portfolio for France. And he hasn't put in brackets, but
he could put in brackets and everywhere else. So what
we want to ask is what is a Turkish portfolio?
It sounds sounds like a ethhmism, and actually kind of is.
While Charles says, is it in any country when you invest,
(03:57):
you effectively have a choice between four domestic asset classes.
You can invest in shares, you can invest in gold,
you can invest in bonds, or you can invent in cash.
So we're going to put a bit quite lot and
all that aside for one moment. That's just stick with
trad got those four things. Now, if the local currency
is worthless or heading in that direction, you expect very
(04:20):
high inflation or huge political instability or whatever it is,
then bonds and cash, they don't have any real value
in that currency. And if that is the case, if
your government is following a policy that structurally debases the
value of the national currency, I don't know who that
could be, who might be doing that, but let's say
your government is following that kind of policy, then you
can't possibly diversify dimest domestically into bonds in cash.
Speaker 3 (04:43):
All you can do.
Speaker 1 (04:45):
Is hold a portfolio made up of fifty percent of
shares and fifty percent of gold, which is what he
calls a Turkish portfolio, because you could call it an
Argentinian portfolio or something like that. And in future it
may be that we call it a French portfolio or
a even a British portfolio.
Speaker 3 (05:01):
I don't know, but you know, the euphemisms might just
keep rolling.
Speaker 1 (05:05):
And one of the reasons that he writes about this
is because he says, look at the social democratic model,
or perhaps what we might call the kleptocratic model. It
is collapsing in France very fast. It's beginning to collapse
in the UK heading in the same direction in Germany,
and in the US, of course, guns and butter, guns
and butter blah blah. One of our our collegue, John
Authors has written in Great Guns and Butter opinion piece
(05:26):
do you read that have led to a fiscal situation,
which Charles says is quote making me very nervous. Indeed,
and he says rational investors should therefore adopt Turkish portfolios
in France, in the UK, in Germany and in the US.
Speaker 2 (05:42):
Wow. So we yes, So he doesn't just single fine
does Okay?
Speaker 3 (05:47):
He goes right for us to write for us too.
Speaker 2 (05:50):
I like that we spoil up the icy classies there,
because that's how I spoil up aid classes. I think
if you're thinking about your act allocation, you say equities, borns,
golden cash, and you know all the other bits are
subsets of those things. Yes, So I mean I agree
with him on that, and it's also hard to disagree
with I mean, really, he's just making a distinction between
real assets and financial assets. I know he kind of
(06:13):
calls them kind of contractual as it's doesn't he something
like that? Yeah? And it I mean obviously I think
I wouldn't. I wouldn't be comfortable saying have half your
portfolio and golden half your portfolio and equities. But I
do take his point and I suppose the only thing,
(06:34):
the one thing that I don't know, and I don't
know about you, but my sort of contrarian tingle in
my brain keeps on saying points have got to be
a bye again at some point. It's not saying that
very strongly, but I can't help but feel that we
will reach a crisis point rather than societal collapse. I mean,
(06:58):
I don't think that's what we'll get. A think we'll
get a toundon point, much like the end of the
nineteen seventies, and at that point it will probably be
a good team, you know, invest in points, but we
could be quite away from.
Speaker 3 (07:09):
That, I think. I mean, you're you're not alone there
in that, you know.
Speaker 1 (07:12):
I've spoken to several people recently who are quite bullish
on UK guilts, but I find that quite difficult. Right now.
Speaker 3 (07:19):
It feels to me like we've got a bit more of.
Speaker 1 (07:22):
This cycle to go through before we hit a point
where the current government or the government that replaces it
genuinely understands that running the equivalent of a six seven
eight percent deficit in the UK, which is where we're
likely to end up this year if we don't put
ourselves together again. I refer you to Monday's podcast please listen.
Is not sustainable and that something has to change. Whether
(07:44):
you want it to or not, whether you feel it's
kind or moral or not, something still has to change.
Speaker 3 (07:50):
I feel we're a way of that. So I'm still
looking at and going Turkish portfolio. Yeah, we could do that.
Speaker 2 (07:57):
I mean I wish that's half my portfolio and gold rate.
Speaker 1 (08:00):
Yeah yeah, half in the nasdak and half of the
nasdak and half in gold for the last decade. If
anyone has done that and is therefore roaringly rich as
a result, please do get in touch, let us know
about it and tell you why why you decided to
do that.
Speaker 3 (08:14):
It would be fascinating.
Speaker 1 (08:15):
But John, that brings us back to the gold price, right, yeah,
I mean, at what point do you look at this
and go this is overbought or do you just look
at it and go, well, Actually, if everyone's going to
get a Turkish portfolio or a French portfolio, whatever we're
going to call it these days, there is a.
Speaker 3 (08:28):
Long way to go.
Speaker 2 (08:29):
But in the past, gold bill markets and quite often, honestly,
I just started to think about these things about like
what should have got telling you and then what was
it wrong about last time? Because the instinct sort of
starts to kick in, and so there's a little bit
in the nervousness there. But in my mind that kind
of historically means that's probably quite a long way to go. Yeah,
And also at a micro level, I mean, I think
(08:52):
the thing that presumably would stop the gold bill market
for good would be a return to some sort of
fiscal discipline, and specifically in the US. I am not
one hundred percent rolling that out because a lot of
people have got such bad Trump derangement syndrome that they
can't see that anything that he does will ever turn
out well. And actually, in many ways he is actually
(09:14):
raising money in unorthodox ways. That said, I do think
that he also would like to see you inflation running
at three to four percent for a while. He'd like
it interest rates to being much lower. So I don't
think that, you know, fiscal discipline is going to return
anytime soon. And while that's the case, and also while
(09:35):
other countries want to get out from under the US
dollar system, it's hard to see why gold would you know,
turn around and quit.
Speaker 1 (09:44):
Really Okay, So John's gold bull, Everyone's gold bull.
Speaker 2 (09:49):
Yeah, well that's the problem. It does feel like that too.
Speaker 1 (09:52):
You are a resident contrarian. How does that fit anyway?
Speaker 2 (09:56):
He used to be?
Speaker 1 (09:56):
For the last decade, we've been able to sit there.
You and I am one of the effectively in a
gold gold market and the contrariant inside a bull market,
which is very unusual position to be in. Right, Yeah,
but that that fail is beginning to change now everyone's
all over. God.
Speaker 3 (10:10):
I was listening to radio yesterday morning.
Speaker 1 (10:12):
I think I said to you the other day, and
there it was long chat a bad gold at prime time?
Speaker 2 (10:16):
That was times low, wasn't it. That wasn't Radio four, No,
it wasn't. I see. Look, honestly, at this point, I'm
sort of looking for either an economist cover, which would
be I think a first ever. I don't think the
economist has ever had golden it's covered not in my
kind of time of being an adult, or maybe something
like you know, a program on the Today program talking
(10:37):
about or something like that. I mean also because I
mean it, I was looking at the gold mine and
ETF and it has doubled in the year today, and okay,
it was undervalued relative to gold for death, and it's
playing catch up. But at the same time, like anytime
an asset doubles in a year and it's not a cryptocurrency,
you've got to sit down and start thing and they will.
(11:00):
How much more exhibierance can get into this. And yeah,
at the same time, I don't feel that it's it's
not a kind of you know, twenty eleven levels yet
and that we did get kind of cover stories and
ATMs ditional gold and things like that at that point.
So I guess that's where I am. But you're right,
(11:22):
all of the models that people who are actually quite
good at analyzing gold have built over the last you know,
twenty our years all suggest that it's actually really very overvalued.
It's not as overvalued as it has been at some
points in the past, but it's certainly not cheap.
Speaker 1 (11:37):
But then I think you could also say, and we'll
finish with this, we could also say that those models
do not take account of possible fiscal breakdown no which
there is a non zero, non zero possibility of full
fiscal breakdown across much of the West. Very hard to
get that into a model, very very hard. When you're
looking at a model for the price of gold, you're
comparing it to the market cap of stock market, So
(11:59):
you're comparing it to history. You're comparing it to where
it moved in this crisis or that this crisis. But
it's very hard to input into your model what happens
when the majority of the West has a debt to
GDP level of one hundred or one hundred plus.
Speaker 3 (12:15):
How did you get that into a model.
Speaker 2 (12:17):
It's proper tail risk stuff. And obviously the actual history
of gold does not go back that far. It's only
been three flooring since the nineteen seventies, so I'm not
you know, it's very hard to see, like, well, what
would the gold place have actually been during World War Two,
which was the last time everyone had dated GDPD issue
was at like over one hundred percent.
Speaker 3 (12:38):
Yeah, but that didn't count.
Speaker 1 (12:39):
That didn't count because everyone also had plans to bring
that level down by you know, not being a war anymore, right, Hello,
peace dividend.
Speaker 3 (12:48):
We have nothing like that anymore.
Speaker 1 (12:49):
There is no plan to bring down the vast cost
of the welfare state by not having a welfare state anymore.
I mean, that doesn't exist. So we cannot even begin
to compare the level of debt we have now with
the level of debt that we have post war.
Speaker 3 (13:00):
Don't get me started. I mean, I do remember that the.
Speaker 1 (13:04):
Wonderful phrase that Russell Napier always used to use, that
you know, we built up the debt in wartime, that
it was built up by killing people, and if you
stop killing people, suddenly you don't ever spend so much money.
And now we built up our debt by keeping people alive,
and was certainly not going to stop doing that.
Speaker 3 (13:21):
So where do you go from here?
Speaker 2 (13:22):
I'd quivered, we're keeping people alive, But that's a that's
a different that's a definite issue.
Speaker 3 (13:28):
I think we had better end up bedge on anything
else we need to add.
Speaker 2 (13:31):
I don't think so. I mean, I think if you're
wanted to be called the one thing I would see
is just think about what your ass allocation was where
it's no sail it down to your ass allocations. But
I'll be honest, I'm not rebalancing. Just know, I'm just saying,
if you're nervous, you know, sailed down the sleeping point,
as the old Wall Street gays used to see.
Speaker 1 (13:52):
Okay, thank you, John, and we're also pleased to know
that you're not selling down. I'm not going to ask
you about a bitcoin account. Thanks for listening to this
week's Maron Talks Money Debrief. If you like us, show, rate, review,
and subscribe wherever you listen to podcasts. I keep sending
questions or comments the Mirror Money at Bloomberg dot net.
I hope you enjoyed the pod we did the other
(14:12):
day answering your questions, do send more. You can also
follow me and John entreprenter or x I'm at merin
sw and John is John Underscore Stepic. This episode was
hosted by me Maren Thumbsup web As, produced by Summersidi
and Moses and
Host
Merryn Somerset Webb
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