Rothschild: World Is Under Greatest Financial Experiment In History

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    Central bankers have never had more power; monetary policy has never been a stranger. All the quantitative easing went straight to the top; investment has no incentive to flow into the larger body.

    The system is top heavy, topsy-turvy and weak in the knees; collapse appears inevitable. Whatever happens next, no one can say, but we are approaching the limits.

    Even Lord Jacob Rothschild, from perhaps the foremost financial dynasty in history, seems aghast at the possibilities.

    “The six months under review have seen central bankers continuing what is surely the greatest experiment in monetary policy in the history of the world. We are therefore in uncharted waters and it is impossible to predict the unintended consequences of very low-interest rates, with some 30 percent of global government debt at negative yields, combined with quantitative easing on a massive scale,” Rothschild writes in the company’s semi-annual financial report.

    The banker notes this policy has led to a rapid growth of stock markets, U.S. stocks have grown threefold since 2008, with investments growing and volatility remaining low.

    The real sector, however, did not enjoy such a profit, as “growth remains anemic, with weak demand and deflation in many parts of the developed world,” according to Rothschild.

    Lord Rothschild is openly admitting that the system is collapsing on the ordinary workers and average people in society.

    Here is the full section from the RIT Capital Partners’ latest half-year financial report:

    The six months under review have seen central bankers continuing what is surely the greatest experiment in monetary policy in the history of the world. We are therefore in uncharted waters and it is impossible to predict the unintended consequences of very low-interest rates, with some 30% of global government debt at negative yields, combined with quantitative easing on a massive scale.

    To date, at least in stock market terms, the policy has been successful with markets near their highs, while volatility, on the whole, has remained low. Nearly all classes of investment have been boosted by the rising monetary tide. Meanwhile, growth remains anemic, with weak demand and deflation in many parts of the developed world.

    Many of the risks which I underlined in my 2015 statement remain; indeed the geopolitical situation has deteriorated with the UK having voted to leave the European Union, the presidential election in the US  in November is likely to be unusually fraught, while the situation in China remains opaque and the slowing down of economic growth will surely lead to problems. Conflict in the Middle East continues and is unlikely to be resolved for many years. We have already felt the consequences of this in France, Germany and the USA in terrorist attacks.

    In times like these, preservation of capital in real terms continues to be as important an objective as any in the management of your Company’s assets. In respect of your Company’s asset allocation, on quoted equities, we have reduced our exposure from 55% to 44%. Our Sterling exposure was significantly reduced over the period to 34% and currently, stands at approximately 25%. We increased gold and precious metals to 8% by the end of June. We also increased our allocation to absolute return and credit, which delivered positive returns over the period, benefiting from a number of special situations. Within this category, our new association with Eisler Capital had an encouraging start. We expect this part of the portfolio to be an increasingly important contributor to overall returns.

    On currencies, we reduced our exposure to Sterling in anticipation of Brexit and the generally unsettled UK political environment. Our significant US Dollar position has now been somewhat reduced as, following the Dollar’s rise, we saw interesting opportunities in other currencies as well as gold, the latter reflecting our concerns about monetary policy and ever declining real yields.

    Below is a snapshot of where every hedge fund wants to end up: the Rothschild investment portfolio.

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    And Where the Rothschild family fortune is hiding:

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    Unfortunately, the American people are reaping none of the benefits and paying all of the costs for an unprecedented banking experiment that is fundamentally leaving the branches of middle class and working society to wither on the vine.



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