Tuesday, November 16, 2010

Did I Mention This Is Not the Time to Be Long Bonds, Any Bonds?

Peter Schiff has launched an International Bond Fund: EuroPac International Bond Fund.

Look, some currencies will depreciate quicker than others, but they are all headed south. Given the problem with the PIIGS, it is completely unclear as to how much money printing the ECB will do. Asian countries have proven to be huge money printers, e.g. China, South Korea. They may slow their money printing short-term, but that's about it. I wouldn't own bonds of any country, now.

There might be some country plays, but I would much rather own stocks in those countries, where you can catch some of the inflation upside, rather than fixed income instruments.

So what is Peter up to? Joe Weisenthal put it best:

Basically a vehicle to mainline the EM bond bubble cut w/ EuroPac pixie dust.


  1. The funny thing about all this money printing and debt issuance is that if we collectively destroy our currencies at roughly the same time and to the same degree, it becomes a zero sum game that basically renders the worlds central banks monetary tools ineffective and useless. I love nothing more then listening to the Fed try to explain why the long bond has crashed while their stated goal is for low rates and low volatility to effectively encourage or trick businesses and the public to make malinvestments. The game is about up--the market wins and the planners lose as always.

  2. Wenzel,
    I'm surprised you made the same error many make. Europacific Mutual Funds has NOTHING to do with Europac, Peter Schiff's brokerage group.

  3. Nevermind, I got confused with another fund group with a similar. I should've known Wenzel doesn't make fauz pas, certainly not as big as the one I thought you did.