Age of Chaos

 

 

We like to pretend that our leaders know what they’re doing. Our fates and livelihoods are in their hands, for crying out loud.

But experience has made it abundantly clear that they don’t.

They really are just putting on a good show, flying by the seat of their pants and hoping the rest of us don’t catch on.

So says Charles Sizemore, Chief Investment Strategist at The Freeport Society.

If you’ve forgotten the full context, here’s Powell from back in March of 2021:

[T]hese one-time increases in prices are likely to have only transient effects on inflation.

As Charles noted, “I suppose ‘transitory’ could mean that it wouldn’t literally last until the end of time.”

But Powell is hardly our only leader with omelet-sized egg on his face. Here’s a fun trip down memory lane for those who’ve forgotten. Enjoy the slow-motion trainwreck…

• “Our experts believe, and the data shows, that most of the price increases we’ve seen are temporary.” – President Biden (2021)
• “We have in recent months seen some inflation ... I personally believe that this represents transitory factors.” – Janet Yellen (2021)
• “Inflation is likely to be transitory.” – Lael Brainard (2021)
• “Transitory has different meanings to different people.” – Jerome Powell
• “Fed officials have worked to clarify that their meaning behind “transitory” inflation is quite different from the public’s.” – Washington Post (2021)
• “Powell admits the Fed got it wrong on inflation and says they should stop calling it ‘transitory’.” – Fox Business News (2021)
• “It’s been a rough year for “team transitory.” – Fortune (2022)
• “I am ready to retire the word transitory.” – Janet Yellen
• “Transitory’ has become an embarrassment.” – The Financial Times
• “Transitory’ has become a swear word to my staff and me over the past few months.” – Raphael Bostic, Head of the Atlanta Federal Reserve

Back to Charles:

We have people fighting inflation they never expected and clearly don’t understand with tools that haven’t worked, hoping – just hoping – that maybe this month will be different. They’re fighting a fire with a toy water gun.

That’s our reality.

 

At this point, we haven’t even mentioned the geopolitical and social issues that impact today’s investment landscape. But they all point toward the same thing…

Growing chaos.

Here’s Charles:

Apart from inflation, Fed incompetence, and a slow-motion meltdown in the regional banking and commercial real estate sectors… we have a potential hot war with China on the horizon.

The recurring theme here is chaos.

We live in an Age of Chaos, and that’s not changing. We can either bury our heads in the sand or we can accept this as true and invest accordingly.

In an Age of Chaos, it pays to stay nimble… and to follow the money. It also pays to consider an age-old investment strategy from a completely fresh – dare I say “revolutionary” – perspective.

And if you throw in the input of one of the top fintech companies in the world… you have a quant-driven strategy that could help you not only survive this Age of Chaos, but thrive despite it.