Billionaires Are Cornering the Gold Market $ABX $GG $GOLD $AU $NEM $PGILF $NCMGY

Follow Us on Facebook   Follow Us on Twitter   Follow Us on You Tube   Follow Us on Linked In   Subscribe To Our Feed

Financial News Media Featured News

Published - March 21, 2017

Billionaires Are Cornering the Gold Market $ABX $GG $GOLD $AU $NEM $PGILF $NCMGY - ( Wire)

New York, NY - Westbrook Radio Commentary: Everywhere you look the "Smart Money" is buying gold at a frenetic pace. That term, "Smart Money," gets thrown around a lot, so I’ll be more explicit.

I mean people who have made billions of dollars investing. George Soros, whose net worth is estimated at $25 billion, for example, and his former partner Stan Druckenmiller, who’s worth $4.4 billion. John Paulson, who graduated from obscurity to legend when he used credit default swaps to bet against the U.S. mortgage market in 2007, netting $4 billion. Since then, his fortune has ballooned to more than twice that.

Read: Billionaires Think This Stock Is Almost Ready To Explode -

I’m talking about Paul Singer, a hedge fund manager Forbes estimates to be worth $2.2 billion. All of these gentlemen are loading up on gold. It’s rapacious. It’s almost as if they’re trying to corner the market. So what is their motive? What do they know that you don’t? I’ll tell you - China’s Collapse. Read this full report from Westbrook Radio at:
Last year, George Soros dumped 37% of his U.S. stocks and put $475 million into Barrick Gold, one of the largest miners in the world. He then sold that stake and went straight to the source, buying 240,000 shares of the SPDR Gold Trust ETF.

His motivation might surprise you. Related: Previously Owned By Barrick Gold Mine Almost Ready To Go Back Into Production It’s China. Soros believes that China’s economy is poised to crash after years of sky-high growth. He has a strong case, too, one that I’ve discussed at length in the past.

See, the problem with China’s growth is that much of it is debt-based. The government basically gives money to banks and encourages them to dole out loans even to unworthy borrowers. This rapid extension of credit has created a huge debt bubble.

At 277% of GDP, China has the highest level of corporate debt in the world. And its national debt load stands at roughly $23 trillion — five times what it was a decade ago, and more than two and a half times the size of the country’s entire economy.

This has Soros fearing a repeat of the 2008 financial crisis.

"Since 2012, the Chinese banking sector has allowed credit to grow by the amount of the entire Brazilian GDP per year," he noted last year. "Our strong suspicion therefore is that a large part of this growth is just credit flowing to otherwise insolvent borrowers."

Obviously, a relapse of the 2007 financial crisis would prove devastating for the global economy, which has yet to fully get its bearings back. And that’s not all.

Broken Balance Sheets & Negative Rates - Druckenmiller also had a harsh dose of reality for the United States. "By most objective measures, we are deep into the longest period ever of excessively easy monetary policies," he says. “Simply put, this is the biggest and longest dovish deviation from historical norms I have seen in my career. The Fed has borrowed more from future consumption than ever before.”

Making matters worse, most of the debt today has been used for financial engineering, and not productive investments.

"The corporate sector today is stuck in a vicious cycle of earnings management, questionable allocation of capital, low productivity, declining margins, and growing indebtedness,” Druckenmiller says. “And we are paying 18x for the asset class." Europe is even worse off, as many central banks there have turned interest rates negative.

Druckenmiller’s solution: “Hint: it has traded for 5,000 years and for the first time has a positive carry in many parts of the globe as bankers are now experimenting with the absurd notion of negative interest rates. Some regard it as a metal, we regard it as a currency and it remains our largest currency allocation.”

Druckenmiller recently plunked $323 million into the SPDR Gold Trust ETF.
The Bond Market Bubble - Indeed, negative interest rates are another major concern for billionaire investors. For Paul Singer, the founder of the $27 billion Elliott Management, gold is undervalued at “a very dangerous time in the global economy” — one in which central banks have made the bond market “the biggest bubble in the world.”

Speaking at the CNBC Delivering Alpha Conference, the respected hedge fund manager said he favors gold and urged the room of investors to sell their bonds. "I think owning medium to long-term G-7 fixed income is a really bad idea," Singer said. "By removing these things that are bad ideas, that’s a helpful thing. Sell your 30-year bonds."

The bond market is $60 trillion. Right now, nearly $10 trillion in fixed income is negative yielding, according to Singer. He added that these prices and yields contain a “tremendous, never-before seen asymmetry between potential further reward and risk.”

Singer is among a number of hedge fund managers who have become increasingly vocal against central bank policy. He said that central banks have created a "tremendous increase in hidden risk” and "unusual dangers that are unique in the ‘5,000 years-ish’ history of finance."

For that reason, gold is “underrepresented in many portfolios as the only money and store of value that has stood the test of time."

“It makes a great deal of sense to own gold. Other investors may be finally starting to agree,” Singer wrote in an April 28 letter to clients. “Investors have increasingly started processing the fact that the world’s central bankers are completely focused on debasing their currencies.”

Related: Should you buy physical Gold, or shares of a Gold mining company that used to be owned by Barrick Gold that is gearing up to get back into production?

So there you have it. China, so long the world’s growth engine, has become a debt crisis waiting to happen. Central banks in Europe have deployed negative interest rates that rapidly erode value. And in the United States wealth has been borrowed from future economic growth to feed bubbles in stocks and real estate. That’s why billionaires are rapidly rushing into their old standby, gold. It’s the only asset that can be trusted right now.

DISCLAIMER: FN Media Group LLC (FNMG) owns and operates (FNM) which is a third party publisher that disseminates electronic information through multiple online media channels. FNMG's intended purposes are to deliver market updates and news alerts issued from private and publicly trading companies as well as providing coverage and increased awareness for companies that issue press to the public via online newswires. FNMG and its affiliated companies are a news dissemination and financial marketing solutions provider and are NOT a registered broker/dealer/analyst/adviser, holds no investment licenses and may NOT sell, offer to sell or offer to buy any security. FNMG's market updates, news alerts and corporate profiles are NOT a solicitation or recommendation to buy, sell or hold securities. The material in this release is intended to be strictly informational and is NEVER to be construed or interpreted as research material. All readers are strongly urged to perform research and due diligence on their own and consult a licensed financial professional before considering any level of investing in stocks. The companies that are discussed in this release may or may not have approved the statements made in this release. Information in this release is derived from a variety of sources that may or may not include the referenced company's publicly disseminated information. The accuracy or completeness of the information is not warranted and is only as reliable as the sources from which it was obtained. While this information is believed to be reliable, such reliability cannot be guaranteed. FNMG disclaims any and all liability as to the completeness or accuracy of the information contained and any omissions of material fact in this release. This release may contain technical inaccuracies or typographical errors. It is strongly recommended that any purchase or sale decision be discussed with a financial adviser, or a broker-dealer, or a member of any financial regulatory bodies. Investment in the securities of the companies discussed in this release is highly speculative and carries a high degree of risk. FNMG is not liable for any investment decisions by its readers or subscribers. Investors are cautioned that they may lose all or a portion of their investment when investing in stocks. This release is not without bias, and is considered a conflict of interest if compensation has been received by FNMG for its dissemination. To comply with Section 17(b) of the Securities Act of 1933, FNMG shall always disclose any compensation it has received, or expects to receive in the future, for the dissemination of the information found herein on behalf of one or more of the companies mentioned in this release. FNMG HOLDS NO SHARES OF India Globalization Capital, Inc.

This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may", "future", "plan" or "planned", "will" or "should", "expected," "anticipates", "draft", "eventually" or "projected". You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company's annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and FNMG undertakes no obligation to update such statements.

“There is an eerie resemblance to what’s happening in China to what’s happened here leading up to the financial crisis in 2007-2008 and it is similarly fueled by credit growth,” Soros said. “It’s eventually unsustainable. But it feeds on itself and it has a lot to do with real estate,” he said.

Stanley Druckenmiller, who managed money for Soros as the lead portfolio manager for Quantum Fund, has echoed that concern.
© 2016 All Rights Reserved. Created, Designed, Owned & Operated by FN Media Group, LLC.
Follow Us on Facebook   Follow Us on Twitter   Follow Us on You Tube   Follow Us on Linked In   Subscribe To Our Feed (FNM) is a third party publisher and news disemmination solutions provider of multimedia platforms that enable officers & directors, corporate communicators, public relations and investor relations officers to leverage content to engage with all their key audiences. Any ideas and opinions presented in any FNM News Alerts, Video clips, Press Releases, RSS Feeds or Social Network Posts are for informational purposes only, and do not reflect the opinions of FNM or any of its affiliates, subsidiaries or partners. UNDER NO CIRCUMSTANCES SHOULD ANY CONTENT CONTAINED HEREIN BE INTERPRETED TO REPRESENT TRADING OR INVESTMENT ADVICE. All viewers agree that under no circumstances will FNM, its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information contained on this or any affiliated website. Read Full Disclaimer.