John Budden’s Dog Bone Portfolio has a precious metals focus, and it is specifically designed to preserve wealth and maintain one’s purchasing power through Kondratieff Winter. Our goal is to weather not only countervailing inflationary and deflationary forces but also to survive competitive devaluations during a period of surreal geopolitical uncertainty. Obviously, portfolio weightings and holdings are dependent on one’s personal risk tolerances and investment objectives. In any event, investors should consider having at least a sleeve of precious metals in their portfolios as insurance against the inevitable devaluation of fiat currencies and also as a cash alternative. The Dog Bone Portfolio is precious metals-centric because we are on the cusp of a reset in all paper currencies. Bonds and paper money promises by governments are no longer trustworthy; in most instances, they are worthless.
Securities should be selected with advice from a qualified registered investment advisor.
February 23, 2023
Overview:
A ‘Perfect Financial Storm’ is brewing, thanks to political clowns and desperate central bankers whose only option is to print fiat currencies, augmented by a debt and derivatives accident waiting to happen, including ever-increasing and horrific geopolitical risk.
Our goal is to preserve purchasing power and sleep soundly through Kondratieff Winter, which should last at least into the 2030s.
Déjà vu all over again, with reference to the 1970s Bull Market in Gold and the one that evolved as a direct result of the post-GFC stimulus binge from 2008 to 2011…
From March 17, 2008, to October 24, 2008, Gold declined, in tandem with the general stock market, from $1011.25 USD to $712.50 USD, based on the London Gold PM Fix (USD). Then the FED and major Central Banks opened the floodgates and Voila!
Gold increased in value by 140% to $1895.00 (USD) by September 5, 2011.
ALERT: Currency Wars have begun in earnest. We are in the ninth inning of U.S. Dollar hegemony, and very few investors understand what this means for markets. Don’t be fooled by the devaluation stock market phenomenon.
Investment Survival 2032:
Very Defensive and Risk Averse… Sleep soundly and go away to a desert island if you wish…
Stock Market Action:
This reminds me of 1974 (Nifty Fifty), 2000 (Tech Wreck), and (GFC) 2008, but the unwinding will be much worse, and the recovery will take much longer. After rereading James Grant’s biography of Bernard Baruch, I am reminded that current investor behaviour is similar to that in 1929. I fear that there will be widespread credit defaults followed by global competitive devaluations that will echo the Weimar Republic era. Plus ça change, plus c’est la même chose…
The Dog Bone Portfolio:
Cash ~ 0%
Bonds ~ 0%
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Canadian Equities ~ 30%
(30%) Gold-Focused Royalty and Streaming Company :
(30%) Franco-Nevada is listed on the TSX: (FNV.TO) and NYSE (FNV)
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Precious Metals (Bullion) ~ 70%
THROUGHOUT RECORDED HISTORY, GOLD AND SILVER BULLION HAVE ENDURED AS REAL GLOBAL TRANSACTIONAL MONEY WHEN ALL FIAT CURRENCIES HAVE FAILED. THEY PROTECT ONE’S PURCHASING POWER THROUGH STAGFLATION, INFLATION, HYPERINFLATION, DEFLATION, DEVALUATION, DEBT DEFAULT AND STOCK MARKET CRASHES.
Gold Bullion ~ 50%
(50%) Kilo Bars – Stored at the Royal Canadian Mint
Silver Bullion ~ 20%
(20%) Sprott Physical Silver Trust is listed on NYSE Arca USD (PSLV) – BEST LIQUIDITY TSX: (PSLV.U), and TSX (PSLV)
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Securities should be selected with advice from a qualified registered investment advisor.