Special Guest John Butler: John Butler is the publisher of the
"Amphora
Report", Author of "The Golden Revolution" and is Chief
Investment Officer at Amphora; Atom Capital
John Butler has 18 years experience in the global financial industry,
having worked for European and US investment banks in London, New York and
Germany. Prior to launching the Amphora Commodities Alpha Fund he was
Managing Director and Head of the Index Strategies Group at Deutsche Bank in
London, where he was responsible for the development and marketing of
proprietary, systematic quantitative strategies for global interest rate
markets. Prior to joining DB in 2007, John was Managing Director and Head of
European Interest Rate Strategy at Lehman Brothers in London, where he and his
team were voted #1 in the Institutional Investor research survey. In addition
to other research, he publishes the Amphora Report newsletter which appears
on several major financial websites. A cum laude graduate of Occidental
College in California, John holds a Masters Degree in International Finance
and Economics from the Fletcher School of Law and Diplomacy, associated with
Harvard and Tufts Universities.
Published 11-07-14
25 Minutes
John Butler saw first hand during his years with Deutsche Bank and Lehman
Bros (prior to its collapse), mounting evidence of Wall Street's
"natural self discipline and internal self regulation of risk taking
activity being pushed aside and a huge industry bias towards excessive
leverage and risk taking control". He knew it could not end well which
led him to become independent of this growing institutional mindset and to
search for alternative approaches.
"... valuations versus real assets is the key element of the end
game"
He recognized that FINANCIAL REPRESSION was fundamentally about limiting
investor choice and to further this institutional direction of increasing
risk taking to finance government debt. He has therefore came to define
Financial Repression from the standpoint of both a narrow and broad
definition:
Financial Repression
BROAD DEFINITION: "Any Policy that constrains the ability of the
financial markets and investor participants in these markets to take rational
actions to invest, diversify and manage the risk of their investment as they
would personally prefer to do."
NARROW DEFINITION: "A specific tool kit of policies implemented by
government which indirectly confiscate the wealth of the private sector and
move it to a combination of the public sector and/or "too large to
fail" institutions."
FINANCIAL REPRESSION IS ABOUT LIMITING INVESTMENT CHOICE
"The whole point of financial repression is to make it difficult
or impossible for an investor to protect themselves"
John feels Financial Repression "is now extremely broad based
(globally) and in fact you have to look very closely to find countries not
actively pursuing some mix of Financial Repression policies."
A Negative Sum Game
Butler has argued in his Amphora Report
that competitive currency debasement is "is not a zero sum game but
rather a negative sum game because policy makers don't realize that by trying
to devalue against each other, unseen they are undermining the very
credibility of unbacked fiat currencies generally."
Increasing the BRICS are "becoming increasingly wary of where all
this is going and as a consequence are diversifying not only their fiat
currency reserves but are diversifying into gold, oil fields and real assets
generally."
How Investors Protect Themselves
"The only free lunch in economics is DIVERSIFICATION. The problem is
that in a world of Financial Repression, the way you diversify yourself is
very different than a world where financial represion is not an issue."
"There is no way out but Currency Debasement"
John outlines in this video specifically what the "new
diversification" must consist of.
He believes the Fed "will blink" as the US dollar continues to
rise as a consequence "of the deflationary pressures which are spreading
across the world." He sees evidence of a major trend reversal coming in
2015 and possibly before the end of 2014.
