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Around the campfire: “Don’t say that – I’ve just bought a house”

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When I had the idea for Glint during the global financial crisis of 2008, it seemed obvious to me that the world deserved a reliable form of money. We all needed a form of money that insulated you from the destructive effects of inflation and from potential breakdowns in the highly leveraged financial system. To me, then and now, the answer was – incorruptible gold.

The everyday man and woman on the street easily understood the idea. My mother would often say: “Son, money doesn’t buy you what it used to.” London cabbies would tell me that “gold, always holds its value”. Experienced high net worth individuals, those who had worked hard through cycles of booms and busts over the last 50 years, they also got it.

But many of the younger analysts and fund managers, those who control the wallets of the big venture capital companies, didn’t get it. They had never experienced double-digit interest rates or difficult recessions.

The 2008 crisis was not allowed to play out. Instead of toppling over the economy was propped up by huge amounts of central bank stimulus. That led to the biggest period of growth seen in over 100 years. No bad thing one might think. Except, what was that growth built on, apart from illusions and credit?

The existing monetary system benefitted some people hugely, even during that 2008 crisis. Easy for them to get a multi-million mortgage; money poured into the funds they managed, fat bonuses returned.

I remember saying to one investment committee that just because house prices were going up in London, it didn’t mean that they always would, and explaining that a house in Japan worth 16 million in 1990 was now, twenty years later, worth 5.5m. The head of the committee looked alarmed and said: “Don’t say that, I’ve just bought a house”. It was probably a very nice and expensive house that was paid for with money lent at very low interest, nearly free, of course only available to those who has a big enough deposit. They were clearly quite short sighted… they didn’t invest in Glint.

Glint continued to find funding from contrarian investors, including many individuals who have worked hard all their lives to build up their wealth. People who have experienced the cycles of boom and bust and who worry about where the global economy and central bank policy is heading.

Covid-19 slammed us into this economic crisis, one that many had expected, but which has turned out to be far worse than anyone imagined. Most people in the investment community that I speak to are now extremely worried about the economy and global debasement of foreign currencies, thanks to the vast government borrowings that have been built up in the space of a few weeks. Suddenly it seems, I am not the daft contrarian, but we at Glint may argue, the visionary.

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