Nomura's Bob Janjuah: Buy Gold and Non-Financials, but Avoid Bonds

Tuesday, 21 Feb 2012 08:25 AM

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Nomura's Bob Janjuah says markets are so rigged by government policies that investing dangers lurk virtually everywhere.

"My personal recommendation is to sit in gold and non-financial high quality corporate credit and blue-chip big cap non-financial global equities," Janjuah writes at Zero Hedge.

"Bond and currency markets are now so rigged by policy makers that I have no meaningful insights to offer, other than my bubble fears."

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Real assets are relatively attractive, says Janjuah. However, he's waiting for the current central bank bubble to burst before going all in.

"I may be waiting five days, five weeks, five months, perhaps five quarters," Janjuah says. "It all depends on when and how our central bank leaders are exposed as lacking credibility and/or lacking the mandates to keep pumping liquidity into the system."

Janjuah says the end of the bubble will be sign posted by either monetary anarchy creating major real economy inflation or by a deflationary credit collapse.

“The end game is incredibly binary in my view, but in between it is pretty much a random walk,” Janjuah says.

“Either way, 'bonds are toast; in any secular timeframe ... which in turn means that asset bubbles in risky assets will get crushed on a secular basis.”

According to Financial Times journalist John Authers, central banks in the west are injecting money into the system, typically by buying bonds, because they want inflation.

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