Gyroscopic Investing

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Clive wrote: So there you have it.  25% gold, 25% stocks, 25% long duration, 25% short duration. 

Not quite 'Fail-Safe' though for countries where a domestic currency crisis could see substantial loss of purchase power relative to imports, but the US might be an exception to that risk.

Very nice Clive.  I hope you are correct about the US being an exception, but just in case I use most of my VP as a currency hedge by holding silver, foreign stocks, bonds, and currency.

Interesting.  For me personally I would not want to use futures for the cash component of my PP.  If gold is the last line of defense of your portfolio, cash is the second, so I want as little paper between me and my, uh, "paper" as possible.  I also prefer to keep the currency hedging in the VP and keep a more or less pure PP, but that's just my two farthings.

I can, however, see how this or something like it might be useful for a non-US investor, particularly those that don't use a major currency like the Pound or Euro.  I think that the 25% allocation to gold may not be a sufficient hedge for those in non-dollar assets.  For example, a small nation currency blowup will not drive the price of gold up enough to offset losses in the other 75% of the portfolio.  And even for the UK and Europe, a currency crisis or severe inflation would likely have a more modest effect on gold than the same crisis in the US.  So holding other currencies makes a lot of sense to me.