Abstract

The Anti-Bubbles is a forward-looking analysis of the opportunities, risks, and unintended consequences of testing the limits of monetary policy, testing the limits of credit markets, and testing the limits of fiat currencies.

The Anti-Bubbles is a contrarian framework that challenges the status quo and complacency of Global Markets toward the Central Bank Put, the false belief and misconception that Central Banks and Governments are infallible and in full control.

The Anti-Bubbles presents the “Lehman Squared” and “Gold´s Perfect Storm” investment theses, elaborating on the front page article published in the Financial Times written edition on the 8th August, 2016 called “Gold’s Perfect Storm.”

Similar to the authors´ first book The Energy World is Flat: Opportunities from the end of Peak Oil, the “the Anti-Bubbles” makes extensive use of historical and interdisciplinary analogies, and coins innovative ideas and concepts such as “anti-bubbles,” “the acronyms,” or “monetary supercycle” among others, which have the potential to become mainstream concepts over the next few years.

The Anti-Bubbles presents both sides of the story, including a “premortem analysis” and powerful theories such as Larry Summer’s prudent imprudence of fiscal expansions, George Soros’ reflexivity theory applied to monetary policy, or Mohamed El-Erian´s T-junction and diplomatic neutrality, among others.

Finally, the book presents a practical implementation guide on “how to make money from the anti-bubbles” (gold, volatility, and correlation) and debunks a number of common implementation mistakes, such as the debate between gold versus gold equities and physical versus paper. In addition to a practical implementation guide on how to avoid the bubbles (duration, government bonds, credit, high yield, emerging markets, and equities) identifying the hidden risks of volatility, false correlation, liquidity, and leverage, that may lead to a “Lehman Squared” scenario.

Keywords

bubbles: duration bubble, financial bubble, Lehman crisis, Lehman 1.0, Lehman squared, anti-bubbles: correlation, gold, liquidity, volatility, tail risk, monetary policy: acronyms, LTRO, negative interest rates, no limits, QE, QQE, test limits of monetary policy, fiscal policy, prudent, imprudence, test limits of credit markets, central bank put, diplomatic neutrality, false correlation, fiat currencies, gold’s perfect storm, Gresham’s Law, monetary supercycle, paper money, Reflexivity Theory, test limits of fiat currencies, T-junction, Chinese yuan CNY, euro, gold derivatives, gold equities, gold options, gold insurance, Japanese yen JPY, paper gold, physical gold, precious metals, relative value, smart gold, U.S. dollar