“You’d be better off keeping your investment reserves in gold at this point.”
That’s the advice from John Paulson. He’s the head of Paulson & Co., a major investment firm. He made billions by spotting the housing bubble in 2007. Wikipedia says he made another $5 billion in 2010 primarily investing in gold.
With those kinds of numbers, we think we can just call Paulson “a big hitter!”
Now Paulson sounds more serious than ever about gold. Here are a few snippets from an interview with Alain Elkann earlier this month (transcript HERE).
- “The amount of money printing the U.S. central bank has done in order to stimulate the economy has also caused doubt. A lot of our growth has been based on fiscal spending that has been financed by the Fed buying the debt of government. The Fed balance sheet has exploded due to ‘quantitative easing’, a polite way of saying ‘money printing’, and inflation resulted. If you had dollars and 9% inflation, this year you lost 9% of your money.”
- “We’re at the beginning of trends that are going to increase the demand for gold, and inflation and geopolitical tensions will determine the rate at which gold increases. This year gold will appreciate versus the dollar, and also over a three, five and ten-year basis.”
- “My anticipation is that bond prices, particularly non-investment grade but also investment grade, will decline throughout the course of this year and yields will rise. As that happens, and as the Fed withdraws liquidity, I would expect that the stock market will also correct, and in the second quarter start to decline from current levels.”
And finally, here is the money quote:
“There has been a significant increase in demand from central banks to replace dollars with gold, and we’re just at the beginning of that trend. Gold will go up and the dollar will go down, so you’d be better off keeping your investment reserves in gold at this point. “
We couldn’t have said it better!