Sunday, March 14, 2010

Gold: commodity without a counterparty or credit risk

"It must still be early in the gold bubble. Two masters of the hedge fund universe, George Soros and John Paulson, have vastly increased their bets on gold."

"I've met privately with veteran investment managers like Morris Offit of Offit Capital Advisers and learned that gold is fast becoming a more highly weighted asset in portfolios. The gold bubble is a function of the growing unrest about the debasement of currencies, not only the dollar, but also the euro and other European currencies whose nations have too great a debt load and must raise gobs of money or risk default."

"Gold's investment glimmer is also a function of growing unease, specifically about the ability of the Obama Administration to reduce the budget deficit and finance extending health care. The rising interest in gold reflects a concern about America's place in the world, an expectation of slower growth in comparison with more dynamic economies in China, India and other developing nations."

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