Inflation is already at 5% and probably headed higher. Here’s a 39-year old survivalist portfolio poised for a return to its glory days.
Is Michael J. Cuggino, vendor of a fund designed to withstand inflation and other disasters, hoping for bad times ahead?
Perish the thought. Here’s his diplomatic take on the protestations from the Federal Reserve that it has inflation totally under control: “We’re hoping they’re right.”
But he adds, “We’re managing for them to be wrong.”
Hope for the best, prepare for the worst. Evidently some investors the share the sentiment. They have entrusted $2.9 billion to Cuggino’s Permanent Portfolio, which mixes a small amount of growth stocks with a large amount of defensive assets: short-term bonds, Swiss francs, precious metals and real estate investment trusts.
These are unsettling times. The latest government report clocked inflation at 5% over the 12 months through May, double the average rate over the past decade. Will the rate subside? It might not. It might feed on itself.
If the price and wage spiral gets worse, Cuggino, crying crocodile tears about the U.S. economy, will probably do very well. He made a small fortune in the last episode of despair on Wall Street. He could make another.
The idea for the Permanent Fund goes back to Harry Browne, a minor celebrity among hard-money fans who enjoyed a spot of limelight as the 1996…