I don’t usually comment on absolute insanity but doing so this time because of the person who said it, Jeffrey Gundlach, CEO of DoubleLine Capital.
Gundlach says the United States could split. He also explained how to invest in that outcome and he predicted Trump would win the election.
Investor Jeffrey Gundlach said on Monday, investor Jeffrey Gundlach said Donald Trump was more likely to win re-election, but regardless of the outcome of the presidential race, the United States could find itself suffering. divided into more countries.
Can America lose faith in democracy? “People are strongly committed to the concept of democracy, but China has experienced tremendous growth and better infrastructure under totalitarian rule,”; Gundlach muses. “What are we doing when our results are worse? Can we change that? Yes, it is possible. I think we will see significant changes in the next six years. “That could even include the US invading many countries,” he said.
Now, Gundlach says, “I think we’re going to move to an area with a fat tail.” He thinks skyrocketing inflation is like deflation or outright deflation.
“I hate long bonds, but I still think you have to own some, and in a deflationary environment, you want your portfolio to have that hedge,” he said.
There is no constitutional provision
There is no provision for states to declare independence.
The United States also does not allow such results if a country declares independence.
We can argue whether a state should be allowed to secede, but there is no way to invest in a no-chance outcome.
Fat Tails vs Fat Tales
I agree with Gundlach about the possibility of change and fat tails but not the fat “story” he suggests.
Interestingly, the topic of fat tails appeared twice today.
The author of Black Swan, a book on fat tails, came up with this topic today as noted in Nassim Taleb Accuses Trump of Incompetence and Denial.