What The World Money Managers, Cycles and Analysts Are Saying About Gold ?
By Indigo Precious Metals Group
As Grant Williams stated in one of his most recent presentations, gold generally invokes just 3 sentiments - Love, Loathing or a Complete Indifference by the investing public.
The segment of the market that believes precious metals should be an intergral part of your portfolio at this moment in history is without doubt very small, which seems very strange considering the historic economic backdrop ....But I digress, instead let us have a look at what some of the world's most prominent and successful money managers, analysts and actual cycles are saying ?
We will attempt to stay away from the most well published 'gold bulls' and instead concentrate on some of the other successful money managers, so in no particular order.....
Ray Dalio (August, 2015)
Founder & Co-Chief Investment Officer, Bridgewater Associates
The world's largest hedge fund firm run by self made billionaire Mr Dalio.
“If you don’t own gold, there is no sensible reason other than you don’t know history or you don’t know the economics of it.”
"we're beyond the point of being able to successfully manage this (economy)... and I worry about another leg down in the economy causing social disruption... Hitler came to power in 1933 because of the social tension between the factions."
"Gold should be a part of everybody's portfolio to some degree because... it is the alternative money.
Martin Armstrong (reported in 2014)
Martin Armstrong is the former chairman of Princeton Economics International Ltd. He is best known for his economic cycle predictions based on the Economic Confidence Model, which he developed. Famous—or infamous—for having predicted the October 1987 Black Monday crash to the very day. He also called the Nikkei stock market collapse in 1989 and the Russian financial collapse in 1998, the 2000 bubble and the economic downturn in 2007 and the top of the gold market in 2011 (not bad !)
From the longer-term perspective, gold rallied perfectly in line with our long-term cyclical models bottoming in 19 years during 1999 following the 1980 high at $875. From there, Gold rallied for 13 years, which was also precisely on track establishing the highest annual closing at $1675.80 in 2012 with the intraday high remaining during the previous year 2011 at $1920.80 in line with the low in the Economic Confidence model.
Switching into a long-term perspective gold is poised for its final high on this run in the year 2032. New highs should also be seen in 2017 and 2020 against the US$ from cycle lows in 2015 to the 1st Qtr 2016.
Panic Cycle Models suggest that higher volatility is due the year of 2017
Jim Grant (July 28, 2015)
James Grant founded Grant’s Interest Rate Observer, a twice-monthly journal of the financial markets since 1983.
“We are in one of the most radical periods of monetary experimentation in the annals of money”, with a “low probability” of a favourable outcome.
You want to have exposure to the reciprocal asset of the paper assets that are the most popular – so gold, to me, is now the conjunction of price, value and sentiment, and I am very bullish indeed.”
Gold is an “investment in financial and monetary disorder”
Stanley Druckenmiller (Reported 3rd Qtr of 2015)
Mr Druckenmiller again self made hedge fund billionaire has a tremendous track record when it comes to investing. His own hedge fund, Duquesne Capital Management, averaged an annual return of 30% from 1986 to 2010.
According to his family office’s most recent SEC filing, Druckenmiller just bought 2.9 million shares of SPDR Gold Shares (NYSE Arca:GLD). The newly taken position in the gold ETF was worth approximately $323.6 million, which made up more than 20% of Druckenmiller’s portfolio of over 1.5 Billion$.
Paul Singer (October 2015)
Paul Singer, billionaire and chief executive officer of Elliott Management Corp.
“In a world where the value of paper money is affirmatively aimed at being degraded by central bank policy, it’s kind of surprising to me that gold can’t catch a bid,”
“I like gold. I believe it’s under-owned. It should be a part of every investment portfolio, maybe five to ten percent.”
David Einhorn, (July 2015)
Greenlight Capital Hedge fund manager & Billionaire
“Monetary policy and regulations have combined like a failed chemistry experiment to create a potentially destructive force that should not exist outside of fiction,” Einhorn, at Grant’s Interest Rate Conference in New York. “This adds to the ultimate attraction of holding gold instead of green paper.”
Paul Mylchreest (July 2015)
Analyst/Strategist at Monument Securities
"The demarketing of gold may be close to running its course as it seems that sellers of paper gold instruments are attempting to induce one more sell-off to fully cover their diminishing short positions. Indeed, signs are emerging that the long Nikkei/short gold trade, which has done so much damage to gold’s price, is becoming problematic."
Paul Brodsky is a co-founder and co-managing member of QB Asset Management
“The key to a successful transition is a credible monetary reset. Gold is the default collateral for money because it has a long and established precedent in this role. All that would be needed would be a fairly equitable distribution of gold among global monetary authorities (taking place now?), and an agreed-upon exchange rate vis-a-vis baseless paper.
It would have to be an exchange rate at which central banks could successfully monetize assets by tendering for physical gold with newly manufactured paper money, an exchange rate high enough to attract enough gold to cover unreserved credit held in the banking system. It’s a high figure."
Russell Napier (January 2016)
Russell Napier, ASIP, is an independent strategist at and co-founder of ERIC
If you had not noticed, 2016 has begun with gold and the USD rising simultaneously. This is different and important. This is very positive for gold and very bad for the world.
The rise of both together may signal that we have just entered that period when this inert non-yielding substance is preferred to those assets that promise a yield but where the scale of future payments is subject to considerable doubt. Also positive for gold, the advent of deflation, following the failure of the easy reflationary solutions promised by non-elected central bankers, will enfranchise aggressive acts of reflation by our elected representatives.
For gold to rise while the USD also rises signals that investors are beginning to see through the terrible burden on the price of the shiny stuff from ever-rising real rates of interest extant since 2011. Real rates have further to rise but a few more days of a strong USD and a strong gold price means gold has probably entered a bull market that should last for decades rather than years; its value boosted initially by its ability to avoid conscription, but underpinned by the authorities’ mass mobilization of resources to ultimately generate inflation.
J. Kyle Bass is the founder and principal of Hayman Capital Management, L.P., a Dallas-based hedge fund, who correctly predicted and profited from the subprime collapse in the USA.
"I'd Much Rather Own Gold Than Paper"
"buying gold is just buying a put against the idiocy of the political cycle. It's that simple."
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