We tend to look to rich people and assume they have all the answers.
But this is one of our greatest moral failings as a society. In fact, there is a Himalaya Mountain Range worth of evidence to show The World’s Most Wealthy are just as messed up (in many cases more) than the rest of us, feeling all sorts of feelings of insecurity, social issues and possessing many self destructive habits.
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Having said that, there is one way in which rich people (the self made ones anyway) are typically good to look at for inspiration – making money.
Speaking of which, one Redditor, posting in the r/Wallstreetsilver Reddit community, recently shared a piece of gossip which he believes could be true by sheer virtue of it coming from some rich people.
“Storytime,” he began his post. “Reflections on observations of the super-rich while on holidays. They seem to know what’s coming.”
He continued: “I live in Switzerland and although I am by no means a rich man, I do like cycling and skiing in nice landscapes. So, I visited Davos, St. Moritz, Cannes, Jungfraujoch and St. Tropez this summer… Some of the conversations there really stuck with me and seemed worth sharing with you.”
The man explains he was deliberately “listening out for conversations about inflation and precious metals,” adding, “Remember, by June WSS was very aware of the exploding Fed Balance sheet and low-interest rates, but it wasn’t on the radar of mainstream officials and media as much.”
“In St. Moritz, I spoke to a (major) trader in pulses who saw all these staple crops going up in price and said it was very unlikely to stop any time soon. That was around the time when Jerome Powell said inflation would be ‘transitory’. A few weeks later I was cycling along the French Riviera when we stopped to get a drink at a marina for superyachts and an aeroplane flew over with a banner advertising physical gold.”
He continued: “The marina had guests from all over the world. I overheard the Dutch owner (I understand Dutch) of a huge superyacht subsequently discussing gold with his friends. One of them noticed the banner and said gold was basically a waste of money when the owner of the yacht said: ‘Yeah well what else are you gonna buy? Stocks are way overvalued, I already own real estate, bonds and savings have useless yields if you subtract inflation. I’ve seen a lot of people lose a lot of money in bubbles and this looks like a big one.'”
“Finally, I went on the highest train in Europe (Jungfraujoch, Switzerland) a few weeks ago, which leads to a James Bond-style observatory and restaurant overlooking the Alps. I got into a conversation with some Irish, Australian and British London bankers and the manager of a large pension fund. They ended up talking about their personal investments and how their allocations to bonds are yielding sh*t returns.”
One of the quote he cites from this conversation was: “Negative interest rates? Can you believe it? And life just goes on as if nothing happened!” He also claimed “one of them kept going on about Treasury Inflation-Protected Securities (TIPS) while the other said: ‘Well that if the asset bubble pops and deflation occurs? Then they won’t protect you.'”
“Without me mentioning it, they got into precious metals and one of them said he was considering getting a large (7 figures) allocation to physical, allocated gold, vaulted in Switzerland. On the way down I spoke to some climbers who traded in commodities (mostly energy) professionally and said they were surprised about how many paper derivatives are traded compared to the physical stuff, and they were wondering aloud how long the world could keep that up.”
The man then said that, though “these might seem like random, anecdotal stories” he hopes others also see the pattern here. In his view the pattern is: “Every time I went to one of these destinations, it seemed like the richest people there were thinking about best allocating their capital in this crazy monetary environment, instead of enjoying the beautiful landscapes.”
Finally, he claimed, “Fed and Government officials told us that the increased debt won’t lead to inflation, but before the official statistics came out, those in the know already knew that wasn’t true.” He also claimed: “Rising input costs get passed down. The official communication went from: No inflation to transitory to sticky but good for us somehow.”
“Finally, the super-rich are often just as confused as you and me, and they’re actively looking for actual stores of value, instead of overpriced bubble assets. More specifically, they are interested in allocated, physical storage (like Palantir) in political safe-havens like Switzerland, rather than just buying the big bank ETFs.”
He concluded by writing: “I’m not sharing all of this to show off my cool summer holidays, I hope this first-hand account can convince you that we’re not that far from serious money moving out of speculative bubbles and potentially moving into risk-off assets such as gold and silver. The fuel for a commodities boom is there, all we need now is a good spark. Stay calm and keep stacking. Our time will come.”
It should be noted that being part of the r/Wallstreetsilver Reddit community it is perhaps not surprising this man is spruiking silver. But there you have it. Food for thought. And food which got the comment section singing.
Some choice comments in the thread include: “Good information. Thanks for sharing,” as well as “Thanks. Enjoyed reading that.”
Another chimed in: “Also, you don’t have to believe my anecdotal stories, go directly to the source. Michael Burry, Warren Buffett, Charlie Munger, Ray Dalio, Druckenmiller, Jim Rogers, Paul Tudor Jones and Palantir are all examples of ultra-wealthy people that are either: 1. Concerned about the size of asset bubbles, 2. inflation, 3. debt and deficits and potential black swans. They speak about these topics quite openly in interviews and allocate accordingly.”
“Sometimes u will learn more from the world by listening then talking.”
Another then asked: “Any thoughts/discussions on cryptos from the rich?” to which the poster of the thread responded: “From the ones I met, literally 0. But then again, most of them were over 45. Perhaps their kids are interested.”
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Finally, one pontificated: “Yeah. I think the wealthy are just as confused as everyone else. Negative interests rates make zero sense and I believe it is a sign that something is seriously wrong with our financial system.” Another Reddit user responded to this, saying: “It keeps cash as a hot potato in theory. Velocity of money I suppose.”
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Preparing for a market crash as a long term investor.
