Pick your poison

Before choir last night, I attended a lecture at Queen’s by an economic historian. Because I live in a little climate change bubble--where degradation of our planet is seen as the primary threat to our future--it’s always interesting to hear from someone with an alternative doomsday scenario. Russell Napier sees financial repression as the looming threat. He said the level of debt taken on by governments (quantitative easing) and by business is unsustainable. The way out is for governments to inflate their way out of trouble. This is a one-two-punch:

1. Create incentives for investors to buy government debt (by taxing other assets).
2. Push inflation to, say 5%, while paying, say 3% on government debt. So debt levels come down at the expense of savers.
   He also said the yen will collapse and the euro is not likely to survive. His advice was to invest in countries that don’t have high debt loads (Switzerland, Singapore) and in gold. So there you have it.
   12-6