May 31, 2024 10:00 PM
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CIS_EMEA_Marketing@e.northerntrust.com
The Weekender: Stealing success
Discussion on strategic thought leadership, innovation, and investment perspectives in sports and finance.
From 'stealing success' to Paulin's Law Jun 01, 2024 Range You might remember our missive predicting a return of Manchester United’s winning ways after Sir Jim Ratcliffe’s announced his incoming involvement in the club. It wasn’
May 31, 2024 10:00 PM
-
CIS_EMEA_Marketing@e.northerntrust.com
The Weekender: Stealing success
Discussion on strategic thought leadership, innovation, and investment perspectives in sports and finance.
From 'stealing success' to Paulin's Law Jun 01, 2024 Range You might remember our missive predicting a return of Manchester United’s winning ways after Sir Jim Ratcliffe’s announced his incoming involvement in the club. It wasn’
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</style><div id="emailPreHeader" style="visibility:hidden; opacity:0; color:transparent; line-height:0; font-size:0px; overflow:hidden; border-width:0; display:none!important">From 'stealing success' to Paulin's Law</div><table width="100%" border="0" cellspacing="0" cellpadding="0" class="em_full_wrap em_body" bgcolor="#ffffff" style="table-layout:fixed"><tbody><tr><td align="center" valign="top"><table align="center" width="600" border="0" cellspacing="0" cellpadding="0" class="em_main_table" style="width:600px; table-layout:fixed"><tbody><tr><td align="center" valign="top"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper mktoContainer" id="Template" style="width:600px"><tbody><tr class="mktoModule" id="image_block_nt_corp7a14f049-5aef-4c24-9483-3d9e8e055c44"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:0px; padding-bottom:0px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td align="center" valign="top" class="em_hide"><div class="mktoImg" id="img088150eed0-4913-4b38-ae31-b16f7acfd6d7"><a href="#" target="_blank" style="text-decoration:none"><img src="https://pages.e.northerntrust.com/rs/504-ZYK-173/images/CIS-Weekender-Email-Banner-600x208.png" width="600" border="0" alt="The Weekender" style="display:block; font-family:Verdana,Geneva,sans-serif; font-size:12px; line-height:15px; color:#000000; max-width:600px"></a> </div></td></tr><tr><td height="0" valign="top" align="center"><div class="em_hide_desktop" style="display:none; width:0; overflow:hidden; max-height:0px!important"><table width="100%" border="0" cellspacing="0" cellpadding="0" align="center"><tbody><tr><td align="center" valign="top"><table width="100%" border="0" cellspacing="0" cellpadding="0" align="center"><tbody><tr><td align="center" valign="top" class="em_full_img"><div class="mktoImg" id="mob_image_1a70c894b-cf0d-436d-853a-b96f142c2f1a"><a href="#" target="_blank" style="text-decoration:none"><img src="https://pages.e.northerntrust.com/rs/504-ZYK-173/images/CIS-Weekender-Email-Banner-600x208.png" width="375" border="0" alt="The Weekender" style="display:block; font-family:Verdana,Geneva,sans-serif; font-size:12px; line-height:15px; color:#000000; max-width:600px"></a> </div></td></tr></tbody></table></td></tr></tbody></table></div></td></tr></tbody></table></td></tr><tr class="mktoModule" id="body_copy_text_nt_corpfdad5974-ca78-48e3-a7f0-ff22ef3cea0c"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:10px; padding-bottom:0px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_side24" style="width:40px"> </td><td align="center" valign="top"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" class="em_txt_white" valign="middle" style="font-family:Equip,Arial,sans-serif; font-size:14px; line-height:20px; font-weight:400; color:#3D4042"><div class="mktoText" id="text_J549367e42-a641-4c2b-a7cc-fd9e9f69a7b4"><p style="text-align:right"><span style="color:#0b4b6b"><strong>Jun 01, 2024</strong></span></p></div></td></tr></tbody></table></td><td width="40" class="em_side24" style="width:40px"> </td></tr></tbody></table></td></tr><tr class="mktoModule" id="headline_text_nt_corp5c2eab57-38d1-4f2b-9cbe-81d174ab7401"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:0px; padding-bottom:0px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_side24" style="width:40px"> </td><td align="center" valign="top"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" class="em_txt_white" valign="middle" style="font-family:Equip,Arial,sans-serif; font-size:20px; line-height:34px; font-weight:500; color:#3D4042"><div class="mktoText" id="text_J1228462fa-3219-43c5-9a28-83ec73dccb32"><p>Range</p></div></td></tr></tbody></table></td><td width="40" class="em_side24" style="width:40px"> </td></tr></tbody></table></td></tr><tr class="mktoModule" id="body_copy_text_nt_corp"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:20px; padding-bottom:20px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_side24" style="width:40px"> </td><td align="center" valign="top"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" class="em_txt_white" valign="middle" style="font-family:Equip,Arial,sans-serif; font-size:14px; line-height:20px; font-weight:400; color:#3D4042"><div class="mktoText" id="text_J5"><p>You might remember our <a href="#">missive</a> predicting a return of [Football Team] winning ways after [Investor’s] announced his incoming involvement in the club. It wasn’t his money we highlighted – but was more his approach to learning and decision-making that drove our conviction. [Surname] draws on a range of expertise, as evidenced through Ineos X, a sports innovation hub that includes the [Sports Teams] and run by no other than the <em>marginal gains</em> guru himself, Sir [Person]. It’s applying the lessons learnt from [Author]’s book <a href="#">Range</a> which highlights success, innovation, and breakthroughs aren’t always about digging deeper into a single domain but about crossing boundaries and bumping into - even stealing - new ideas. Breakthroughs often occur at the margin of discipline.<br><br>Breakthroughs like <em>beating Man City in the FA Cup Final last weekend</em>.<br></p></div></td></tr></tbody></table></td><td width="40" class="em_side24" style="width:40px"> </td></tr></tbody></table></td></tr><tr class="mktoModule" id="headline_text_nt_corp3fa4a4d3-c7ed-4664-911e-e9183e5c715c"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:0px; padding-bottom:0px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_side24" style="width:40px"> </td><td align="center" valign="top"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" class="em_txt_white" valign="middle" style="font-family:Equip,Arial,sans-serif; font-size:20px; line-height:34px; font-weight:500; color:#3D4042"><div class="mktoText" id="text_J1ca0fc708-6e6f-465d-af8b-54df81dd7996"><p>Learning</p></div></td></tr></tbody></table></td><td width="40" class="em_side24" style="width:40px"> </td></tr></tbody></table></td></tr><tr class="mktoModule" id="body_copy_text_nt_corpde1f6a1c-4841-4e4a-838b-5b2a2851562b"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:20px; padding-bottom:20px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_side24" style="width:40px"> </td><td align="center" valign="top"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" class="em_txt_white" valign="middle" style="font-family:Equip,Arial,sans-serif; font-size:14px; line-height:20px; font-weight:400; color:#3D4042"><div class="mktoText" id="text_J5d6df4796-d2e0-474b-88d8-ad5eacfc1d2c"><p>I was lucky enough to be invited to a client onsite this week where these ideas were evident. This client had invited speakers from a wide range of business domains, and it was clearly evident that most people present picked-up new ways of solving old problems – <em>problems which all customer-focused businesses seemed to share</em>. The audience was not just made up of senior leaders or siloed teams, but practitioners from across the business. A ‘no-iPhone’ rule combined with immediate breakout sessions provided a fertile context to discuss topics and you could see them thinking about how to apply <em>new ideas</em> in their day jobs. That signals a learning culture, one critical for success in any knowledge based pursuit like fund management. Such recognises that failures are inevitable on the road to success, that marginal gains compound and it makes sense to steal from the best of what others have had worked out.<br><br>But does the same culture exist with allocators? Many say it does. But I’m not so sure.<br></p></div></td></tr></tbody></table></td><td width="40" class="em_side24" style="width:40px"> </td></tr></tbody></table></td></tr><tr class="mktoModule" id="headline_text_nt_corp0015e244-d863-4176-8cd4-0f5c8151de01"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:0px; padding-bottom:0px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_side24" style="width:40px"> </td><td align="center" valign="top"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" class="em_txt_white" valign="middle" style="font-family:Equip,Arial,sans-serif; font-size:20px; line-height:34px; font-weight:500; color:#3D4042"><div class="mktoText" id="text_J1b7777a8b-8d67-4709-a341-77d78b17eb17"><p>Group think</p></div></td></tr></tbody></table></td><td width="40" class="em_side24" style="width:40px"> </td></tr></tbody></table></td></tr><tr class="mktoModule" id="body_copy_text_nt_corp9b0b5e33-636b-415f-8645-5f433bbfb690"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:20px; padding-bottom:20px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_side24" style="width:40px"> </td><td align="center" valign="top"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" class="em_txt_white" valign="middle" style="font-family:Equip,Arial,sans-serif; font-size:14px; line-height:20px; font-weight:400; color:#3D4042"><div class="mktoText" id="text_J520d0486b-50d2-477b-8c84-3cd9f609c65b"><p>Whenever I attend allocator events it’s often the same folks, the same consultants, talking the same stuff. Over and over. Few ‘dare to be different’ and it seems that many people prefer to remain ‘safer in consensus’. But I’m worried. While many CIOs acknowledge the world <em>has changed</em>, their investment portfolios <em>haven’t</em>. For example, they all love infrastructure yet <em>loath the materials required to build them</em>. They see deglobalization <em>yet still invest in global indices</em>. They see de-dollarization <em>yet own no gold</em>. The see inflation volatility yet own bonds, <em>lots and lots of bonds</em>. And some think equities are expensive, yet own <em>little direct exposure</em> to the UK, Japan, Europe, and/or China where there’s better value. Oh and those in the UK talk of growing ‘national interest’ yet own little domestic equities.<br><br>That may soon change as we in the UK start to ‘steal’ ideas from other systems that work well, like Australia, like Sweden, like Canada. And increasingly like Japan.<br></p></div></td></tr></tbody></table></td><td width="40" class="em_side24" style="width:40px"> </td></tr></tbody></table></td></tr><tr class="mktoModule" id="headline_text_nt_corp468a0843-e36a-434e-86df-a06f6bab052c"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:0px; padding-bottom:0px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_side24" style="width:40px"> </td><td align="center" valign="top"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" class="em_txt_white" valign="middle" style="font-family:Equip,Arial,sans-serif; font-size:20px; line-height:34px; font-weight:500; color:#3D4042"><div class="mktoText" id="text_J1f704a164-eecb-484d-81fd-9459c2f39f7b"><p>Great artists steal - Picasso</p></div></td></tr></tbody></table></td><td width="40" class="em_side24" style="width:40px"> </td></tr></tbody></table></td></tr><tr class="mktoModule" id="body_copy_text_nt_corp58cc38fd-c4f5-4200-b298-47647e81ee1c"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:20px; padding-bottom:20px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_side24" style="width:40px"> </td><td align="center" valign="top"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" class="em_txt_white" valign="middle" style="font-family:Equip,Arial,sans-serif; font-size:14px; line-height:20px; font-weight:400; color:#3D4042"><div class="mktoText" id="text_J5a6eef9b1-f5ac-4e47-b88b-fe4a49f9691a"><p>I would ‘steal’ this idea from the Japanese: <strong>Japan is to shift $640bn in public pension money into active investing, of which <a href="#">25%</a> will go to domestic Japanese equities.</strong> Just imagine if the UK, the second largest pension pot on the planet but with the lowest allocation to domestic equities (and with a combined value some 50% higher than all stocks in the FTSE), did something similar. They’ve already copied Japanese disclosure rules <span style="color:#3d4042; font-family:Equip,Arial,sans-serif; font-size:14px; font-style:normal; font-variant-ligatures:normal; font-variant-caps:normal; font-weight:400; letter-spacing:normal; orphans:2; text-indent:0px; text-transform:none; widows:2; word-spacing:0px; white-space:normal; background-color:#ffffff; text-decoration-style:initial; text-decoration-color:initial; display:inline!important; float:none">– </span>which could lead to some awkwardness if British pension trustees ignore their own shares – especially if those are outperforming. As the Swedes, who have a vibrant domestic equity culture, often say, <em>‘<a href="#">why cross the river to get water</a>’?</em> <br><br>And I can’t help but wonder what this announcement by the world’s largest money manager signals for their expectations for money flows. For such is its size, it seldom does things by halves: <a href="#">BlackRock launches active small-cap fund in UK</a>.<br></p></div></td></tr></tbody></table></td><td width="40" class="em_side24" style="width:40px"> </td></tr></tbody></table></td></tr><tr class="mktoModule" id="headline_text_nt_corp91a3d7fa-2bda-48b0-b358-7efe7c262615"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:0px; padding-bottom:0px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_side24" style="width:40px"> </td><td align="center" valign="top"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" class="em_txt_white" valign="middle" style="font-family:Equip,Arial,sans-serif; font-size:20px; line-height:34px; font-weight:500; color:#3D4042"><div class="mktoText" id="text_J1377a1b3c-0df2-48aa-8aa2-3c8af3ce65f4"><p>Innovation as an asset class</p></div></td></tr></tbody></table></td><td width="40" class="em_side24" style="width:40px"> </td></tr></tbody></table></td></tr><tr class="mktoModule" id="body_copy_text_nt_corp48b410ae-8be0-4233-abe7-d4f8595b38ad"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:20px; padding-bottom:20px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_side24" style="width:40px"> </td><td align="center" valign="top"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" class="em_txt_white" valign="middle" style="font-family:Equip,Arial,sans-serif; font-size:14px; line-height:20px; font-weight:400; color:#3D4042"><div class="mktoText" id="text_J5bb9788e4-9bc5-4ee3-83f0-f425191723df"><p>I met the leader of a large venture capital firm last week who suggested the world’s biggest problem is<em> ‘too much debt’</em> to which there are only two viable solutions: inflation and/or a productivity miracle. Appealing logic. He went on to articulate the opportunity-set from an allocator’s viewpoint, who arguably has<em> too little</em> exposure to inflation (hard assets) and maybe even less to “innovation”. He has identified a solution to provide institutional-grade access to <strong>innovation as an asset class</strong>. <em>Smart</em>. <br><br>Another I met has identified a similar structural challenge - demographics - and was discussing the idea of <strong>agriculture as an asset class</strong>. Given a history of non-correlated returns, structural revenue drivers and inflation links, it’s a good diversifier. But its purpose is also worth mentioning. One that solves a critical problem facing a host of industries: <em>succession</em>. With the average age of a farmer now being into his or her 60's – and often without having an obvious successor lined up – this fund can partner with them, provide a more timely and smoother transition, while retaining generational IP and delivering scale benefits both up and downstream and supporting diversification across regions, crops and growing seasons.<br><br>These ideas both seem more sensible alternatives to alternatives <em>that are no longer that alternative.</em><br></p></div></td></tr></tbody></table></td><td width="40" class="em_side24" style="width:40px"> </td></tr></tbody></table></td></tr><tr class="mktoModule" id="headline_text_nt_corp686bdfdd-076d-44bb-8b48-fe56c39aa47d"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:0px; padding-bottom:0px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_side24" style="width:40px"> </td><td align="center" valign="top"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" class="em_txt_white" valign="middle" style="font-family:Equip,Arial,sans-serif; font-size:20px; line-height:34px; font-weight:500; color:#3D4042"><div class="mktoText" id="text_J16de248e3-d147-40f2-ba2d-528d00be47fa"><p>Let’s grab a drink and talks things through</p></div></td></tr></tbody></table></td><td width="40" class="em_side24" style="width:40px"> </td></tr></tbody></table></td></tr><tr class="mktoModule" id="body_copy_text_nt_corpa2bfc3fe-b0ff-4eac-9bed-d4c599eb57a5"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:20px; padding-bottom:20px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_side24" style="width:40px"> </td><td align="center" valign="top"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" class="em_txt_white" valign="middle" style="font-family:Equip,Arial,sans-serif; font-size:14px; line-height:20px; font-weight:400; color:#3D4042"><div class="mktoText" id="text_J5ed451f6e-17d5-4bae-bfae-c36debd732fa"><p>Abraham Lincoln said the best way to defeat an enemy is to make them your friend. This starts with communication, an opportunity to walk in their shoes, build empathy and understanding. Despite being a long way off becoming ‘friends’, the fact the US and Chinese militaries are ‘<a href="#">talking</a>’ again is good news and directionally positive. Both countries would benefit from stronger alignment, not least to help tensions from escalating further in the Middle East and elsewhere.<br><br>Let’s hope further communications also include alcohol, for I remain convinced that team-sprit lies in <a href="#">the bottom of a pint glass</a>.<br></p></div></td></tr></tbody></table></td><td width="40" class="em_side24" style="width:40px"> </td></tr></tbody></table></td></tr><tr class="mktoModule" id="headline_text_nt_corp4dcf7be6-674f-437d-94bd-318d7449f381"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:0px; padding-bottom:0px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_side24" style="width:40px"> </td><td align="center" valign="top"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" class="em_txt_white" valign="middle" style="font-family:Equip,Arial,sans-serif; font-size:20px; line-height:34px; font-weight:500; color:#3D4042"><div class="mktoText" id="text_J131a4541c-9413-43b0-b953-9170a33fca54"><p>Gaining leverage through leverage</p></div></td></tr></tbody></table></td><td width="40" class="em_side24" style="width:40px"> </td></tr></tbody></table></td></tr><tr class="mktoModule" id="body_copy_text_nt_corp143092b1-0850-49f9-a372-7f6fe1087fb4"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:20px; padding-bottom:20px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_side24" style="width:40px"> </td><td align="center" valign="top"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" class="em_txt_white" valign="middle" style="font-family:Equip,Arial,sans-serif; font-size:14px; line-height:20px; font-weight:400; color:#3D4042"><div class="mktoText" id="text_J5e8310a10-0543-45f5-818d-352154422926"><p>But if things remain a little frosty, and if China really wanted to exert some pressure, it might try to engineer domestic inflation – to export it to the US via the manufacturing/IP channel and put pressure on the US, suffering under the weight of its debt burden (could rising <a href="#">freight rates</a> be signaling this already?) Clearly the property market is key to this calculus. It embodies system collateral, and with it impacts confidence and so, consumption (demand). <em>Fix that you will fix a lot of things.</em> The other avenue open to China would be to influence commodities. And as the largest buyer of many commodities, then they probably could. Commodities impact inflation expectations, which in turn influence rates. And if you can influence rates, as <a href="#">Luke Gromen</a> suggests, you might cause a highly-indebted nation’s debt service to go > its defence budget, violating “Ferguson’s Law”. Who knew!?<br></p></div></td></tr></tbody></table></td><td width="40" class="em_side24" style="width:40px"> </td></tr></tbody></table></td></tr><tr class="mktoModule" id="headline_text_nt_corp7ce1703a-5536-4e8b-8455-cae19c845045"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:0px; padding-bottom:0px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_side24" style="width:40px"> </td><td align="center" valign="top"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" class="em_txt_white" valign="middle" style="font-family:Equip,Arial,sans-serif; font-size:20px; line-height:34px; font-weight:500; color:#3D4042"><div class="mktoText" id="text_J1304ae789-782e-4fe6-9560-d85c34176bc4"><p>Ferguson’s Law</p></div></td></tr></tbody></table></td><td width="40" class="em_side24" style="width:40px"> </td></tr></tbody></table></td></tr><tr class="mktoModule" id="body_copy_text_nt_corpd73e771e-d342-49b4-ab4e-2fac4cc0767a"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:20px; padding-bottom:20px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_side24" style="width:40px"> </td><td align="center" valign="top"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" class="em_txt_white" valign="middle" style="font-family:Equip,Arial,sans-serif; font-size:14px; line-height:20px; font-weight:400; color:#3D4042"><div class="mktoText" id="text_J51ae377e6-0b6e-4954-94e4-7771c245d405"><p>“Any great power that spends more on debt service (interest payments on the national debt) than on defence will not stay great for very long.” True of Hapsburg Spain, true of <em>ancien régime </em>France, true of the Ottoman Empire, true of the British Empire, this law is about to be put to the test by the US beginning this very year, when (<a href="#">according to the CBO</a>) net interest outlays will be 3.1% of GDP, defence spending 3.0%”. <a href="#">Bloomberg</a>.<br><br>Got gold?<br></p></div></td></tr></tbody></table></td><td width="40" class="em_side24" style="width:40px"> </td></tr></tbody></table></td></tr><tr class="mktoModule" id="headline_text_nt_corp9ca213dc-aaa2-458c-8924-d0a0989b4a99"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:0px; padding-bottom:0px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_side24" style="width:40px"> </td><td align="center" valign="top"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" class="em_txt_white" valign="middle" style="font-family:Equip,Arial,sans-serif; font-size:20px; line-height:34px; font-weight:500; color:#3D4042"><div class="mktoText" id="text_J1590e6e1b-337d-4024-8b67-9fe18cd04566"><p>Trust. In. Gold</p></div></td></tr></tbody></table></td><td width="40" class="em_side24" style="width:40px"> </td></tr></tbody></table></td></tr><tr class="mktoModule" id="body_copy_text_nt_corp0f36e33f-3891-4a80-9cc4-a232c41c1311"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:20px; padding-bottom:20px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_side24" style="width:40px"> </td><td align="center" valign="top"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" class="em_txt_white" valign="middle" style="font-family:Equip,Arial,sans-serif; font-size:14px; line-height:20px; font-weight:400; color:#3D4042"><div class="mktoText" id="text_J54959a4fc-e85d-4ac6-bb4c-f9328bbcf3ca"><p>There’s plenty of reasons for gold’s accession and for why it is ignoring the usual constraints of high real interest rates (which increase the opportunity cost of holding it). The first, it’s suggested, is it doesn’t believe in rates staying high. Rather, it discounts repression, where real-rates are kept artificially low by central banks to assist with deleveraging (see above: <em>too much debt</em>). This could erode the value (and trust) in reserve currencies, like the dollar. A scenario that can accelerate when central bankers fear of being locked-out of dollar based systems, due to others’ actions. Gold recently <a href="#">surpassed the Euro</a> as the second largest reserve asset, a feat in itself, but which still accounts for less than 20% of total reserves. Historically, during periods where system trust erodes (think WW2, the 70s) gold has accounted for up 70% of central bank reserves and up to 10% of financial assets (per <a href="#">Gainsville Coins</a>). As it’s only about 3% today, it would need to 3 bag before reaching historical averages. So that’s your set up, although I can’t help thinking there’s another driver. <br><br>Namely, <em>digital gold</em> – that will embody the characteristics of bitcoin (being divisible, transportable and transferable) but with the backing and trust of the oldest store of value in the world. Unlike pension funds, golds future may actually lie in its past – a future you will hear more about in our upcoming interview with David Tait, CEO of the World Gold Council. It’s a hugely interesting and ambitious idea.<br></p></div></td></tr></tbody></table></td><td width="40" class="em_side24" style="width:40px"> </td></tr></tbody></table></td></tr><tr class="mktoModule" id="headline_text_nt_corp4887f1bb-e1bb-4a73-84b3-b113fdf417b0"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:0px; padding-bottom:0px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_side24" style="width:40px"> </td><td align="center" valign="top"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" class="em_txt_white" valign="middle" style="font-family:Equip,Arial,sans-serif; font-size:20px; line-height:34px; font-weight:500; color:#3D4042"><div class="mktoText" id="text_J143b16bff-229b-49cb-904f-7325c99a0ef2"><p>Paulin’s Law (if interested)<br></p></div></td></tr></tbody></table></td><td width="40" class="em_side24" style="width:40px"> </td></tr></tbody></table></td></tr><tr class="mktoModule" id="body_copy_text_nt_corpc7706d60-e38d-4d9d-8b48-d0d0c5e0b103"><td align="center" valign="top" bgcolor="#FFFFFF" class="em_dark" style="padding-top:20px; padding-bottom:20px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_side24" style="width:40px"> </td><td align="center" valign="top"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" class="em_txt_white" valign="middle" style="font-family:Equip,Arial,sans-serif; font-size:14px; line-height:20px; font-weight:400; color:#3D4042"><div class="mktoText" id="text_J5b472a4e6-71fc-4d42-b31a-73d6c43f9fb4"><p>All groceries must go from the vehicle to the house in one trip – it does not matter how many bags there are. You must never enter the pool by the stairs. If you mate dies lifting weights, add 50kg to the bar before calling the ambulance. Never turn down a breath mint. And write down your dreams (well, maybe just some of them).<br><br>Have a great weekend.</p></div></td></tr></tbody></table></td><td width="40" class="em_side24" style="width:40px"> </td></tr></tbody></table></td></tr><tr class="mktoModule" id="single_profile_card_left_image_nt_corpd6831e1b-04d8-42ad-a2bd-adc882056940"><td align="center" valign="top" bgcolor="#F6F6F6" class="em_dark" style="padding-top:20px; padding-bottom:20px"><table width="600" border="0" cellspacing="0" cellpadding="0" align="center" class="em_wrapper" style="width:600px"><tbody><tr><td width="40" class="em_hide" style="width:40px"> </td><td align="center" valign="top" class="em_aside24j"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0" dir="ltr"><tbody><tr><th valign="top" class="em_clear"><table align="left" class="em_wrapper" width="220" border="0" cellspacing="0" cellpadding="0" dir="ltr" style="width:220px"><tbody><tr><td align="center" valign="top"><div class="mktoImg" id="img326c11954b-3170-4cdc-8799-496b0b78a9a4"><a href="#" target="_blank"><img src="https://pages.e.northerntrust.com/rs/504-ZYK-173/images/Paulin Gary 400x400.jpg" width="220" alt="Gary Paulin" class="em_full_img" style="display:block; font-family:Verdana,Geneva,sans-serif; font-size:12px; line-height:15px; color:#000000; max-width:220px"></a> </div></td></tr></tbody></table></th><th width="48" class="em_hide em_clear" style="width:48px"> </th><th valign="top" class="em_clear"><table align="right" class="em_wrapper" width="252" border="0" cellspacing="0" cellpadding="0" dir="ltr" style="width:252px"><tbody><tr><td align="center" valign="top" class="em_ptop24"><table align="center" width="100%" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td align="left" valign="middle" class="em_txt_white" style="font-family:Equip,Arial,sans-serif; font-size:20px; line-height:24px; font-weight:500; color:#3D4042; padding-top:5px"><div class="mktoText" id="text_92de6ca7bc-ae4d-45e2-8a45-c9f64f4eebf2"><p>Gary Paulin</p></div></td></tr><tr><td align="left" valign="middle" class="em_txt_white" style="font-family:Equip,Arial,sans-serif; font-size:16px; line-height:24px; font-weight:400; color:#3D4042; padding-top:12px; font-style:italic"><div class="mktoText" id="text_932390e72a-376f-415e-854e-fd79818b034c"><p>Head of International Enterprise Client Solutions, Northern Trust</p></div></td></tr><tr><td align="left" valign="middle" class="em_ptop em_txt_white" style="font-family:Equip,Arial,sans-serif; 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