Sunday, September 02, 2012 – with Anthony Wile
John Butler The Daily Bell is pleased to present this exclusive interview with John Butler (left).
Introduction: John Butler is a Marin County native who studied economics, history, philosophy and international politics at university before embarking on a career in the financial industry. He worked for over 15 years as an interest rate, currency and commodity strategist at major investment banks in North America and Europe prior to founding his own independent investment and advisory firm, Amphora Capital. While at Lehman Brothers in the mid-2000s, he was ranked #1 for Interest Rate Strategy in the Institutional Investor Survey. He currently serves as the Chief Investment Officer of the Amphora Commodities Alpha Fund and is the publisher of the popular Amphora Report investment newsletter, featured on a number of prominent financial websites. John is also the author of The Golden Revolution: How to Prepare for the Coming Global Gold Standard, published by John Wiley and Sons (2012). A frequent speaker and presenter at investment conferences and seminars around the world, his research has also been featured in the Wall Street Journal, Financial Times, Boerzenzeitung and theFrankfurter Allgemeine Zeitung, among other publications.
Here's a brief snippet:
Daily Bell: Do you consider yourself an Austrian oriented investor or economist?
John Butler: Absolutely, and in more ways than one. Austrians are in key respects the most humble of economists. They understand the limits to knowledge, in particular at the macro level above a complex system. The power of Austrian economics from a trader's point of view is that it can inform an investment process but also recognizes its natural limits. As such, it helps the trader to avoid the common pitfall of thinking that they know more than they actually do.
Daily Bell: Why do Wall Street firms use Keynesian analysis when it doesn't work?
John Butler: Wall Street firms spend much time trying to anticipate what the central banks and fiscal policymakers will do. Most central banks operate with a neo-Keynesian framework and employ primarily neo-Keynesian economists. So if you're trying to anticipate changes in policy, you adopt their framework and you hire people who worked there and who still have connections there and who claim that they can keep you one step ahead of the next manipulation of interest rates.
Read More John Butler: Absolutely, and in more ways than one. Austrians are in key respects the most humble of economists. They understand the limits to knowledge, in particular at the macro level above a complex system. The power of Austrian economics from a trader's point of view is that it can inform an investment process but also recognizes its natural limits. As such, it helps the trader to avoid the common pitfall of thinking that they know more than they actually do.
Daily Bell: Why do Wall Street firms use Keynesian analysis when it doesn't work?
John Butler: Wall Street firms spend much time trying to anticipate what the central banks and fiscal policymakers will do. Most central banks operate with a neo-Keynesian framework and employ primarily neo-Keynesian economists. So if you're trying to anticipate changes in policy, you adopt their framework and you hire people who worked there and who still have connections there and who claim that they can keep you one step ahead of the next manipulation of interest rates.
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