“When you drive on ice, you have this delayed feedback so that when you do something, nothing happens until all of a sudden it does. That’s what central-bank interventions do to this homeostatic system, they delay it and they concentrate it through time.” – Mark Spitznagel, Universa Investments
USAGOLD note: Spitznagel, who is associated with Nicholas Taleb of black swan fame, sees the Fed as exacerbating problems in the economy rather than mitigating them. As such, he worries about economic destruction ahead. That eventuality, though, doesn’t “necessarily mean someone should just hide away.” He says “gold is pretty darn good. You just have to understand there’s been a lot of noise around it.” Noise aside, there are really three approaches to taming the beast. One is to take advantage of the situation through trading strategies, i.e., what Sptiznagel offers through Universa Investments. The second is to take a more armchair approach by diversifying with a proven hedge – which is where gold enters the picture. The third option, of course, is to do a little of both.