If you guessed they are all long gold - as their favorite investment right now, you'd be correct.
Greenlight Capital CEO David Einhorn, In a letter to shareholders, said he is using gold to hedge against “imprudent” global monetary and fiscal policies. Like Gundlach, he is concerned about US debt hitting new limits.
While speaking to Bloomberg on June 12, billionaire investor Paul Tudor Jones revealed that his favorite pick in the next 12–24 months is gold. He thinks that if gold hits $1,400 per ounce, it will quickly move to $1,700. After Donald Trump’s tarrif tweet on May 5, Stanley Druckenmiller dumped his other investments and piled into Treasuries, which he suggests along with gold in this environment.
These guys made their billions by being right in an environment where a very few wrong decisions will bankrupt you.
But if you only understand one thing about gold understand this: GOLD IS A HEDGE AGAINST INSTABILITY. It doesn't really rise or fall much in value, It just falls out of favor when the global economy appears stable, and falls back into favor when the global economy is unstable.
The Global economy had never been more unstable. Debt is exploding. Real Rates are deeply negative. Nominal rates are negative in much of the world and will be so here too soon. Wealth Gaps are enormous and ever increasing.. And all these problems are accelerating.
BUT - HASN"T THIS BEEN THE CASE FOR THE LAST 40 years?
Yes it has. Good point. The difference now is that nobody is even giving lip service to trying to solve these problems. Those in power are milking the system to get every last penny out of it before it collapses. Those out of power who seek power are looking to tear it all down and start over.
Most in the middle are just bewildered.
If your attitude is SO FAR SO GOOD - WHY WORRY - you're like the guy who jumped off the Empire State Building and said that as they passed the window on the 40th floor.
If you, like so many others, see instability, maybe hedge against it a bit with gold.
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