Look Who’s Buying Gold Big Time!
To us, the real estate bubble was blindingly obvious. That is why we tend to keep an eye on those who also saw it coming. Ron Paul is a case in point. Not only did he see it coming, he famously explained in Congress and in detail exactly how it would unfold.
And so it did.
Now two important figures in the investment world who made their chops (and untold millions of dollars) calling the housing bubble back then are turning to gold.
Michael Burry and John Paulson. A new Business Week article says, “Michael Burry and John Paulson hit the jackpot when they called the housing crash. Now they’re betting on gold.”
Michael Burry was made famous in the movie about the bursting of the mortgage bubble, The Big Short.
Burry, who was played by a scruffy-looking Christian Bale in the movie, made himself and the investors in his fund hundreds of millions of dollars by shorting mortgage credit instruments.
Burry was also on our radar screen in 2022. While the Fed was patiently explaining transitory inflation, Burry was tweeting furiously about inflation on our doorstep. He was right and the Fed officials have been making excuses ever since about the highest inflation in more than 40 years.
John Paulson is 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.
About a year ago we cited Paulson in these pages on global de-dollarization: “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.”
Good call, John!
Now to keep you up to date, Business Week reports that Burry has placed an $8 million stake in gold. And after examining his firm’s SEC filings, Business Week tells us that Paulson also has big bets on gold.
As Paulson told an interviewer last year, “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.”