The Billionaire Gold Rush

Guest post from James Cordelaine

One of the eternal questions in finance is: When do a few coincidences become a trend, and when does that trend become a stampede you ignore at your own peril?  Well in the past couple of weeks, it’s become clear if we ignore all the billionaires scurrying for gold it very well may be at our own risk.

First it was Stanley Druckenmiller, one of the most phenomenally successful investors of all time, boldly standing up at the Sohn Investment Conference, in a room packed with steadfast pushers of paper —stocks, bonds, mutual funds — and proclaiming they should sell their stocks and buy gold.  It was a breathtaking moment, but was it a one-off, or the first warning signs of an oncoming avalanche?

The next was notorious firebrand and lightning rod of controversy David Einhorn telling Bloomberg our monetary policy is so “counterproductive” that gold was increasingly the safer choice over mismanaged markets.  Okay, two boulders of impressive size have just plummeted past, but maybe it’s raining rocks today. Then again…

The third tumble was renowned “vulture capitalist” Paul Singer who, it was reported in Newsmax, told his clients recently that he is recommending owning gold.  At this point we see billionaire after billionaire making two unprecedented moves: First, airing the dirty laundry of Wall St. and its rapidly diminishing faith in the Federal Reserve’s competence, and second: open bullishness on gold.  This is certainly not to say the super-wealthy don’t covet gold, just that they rarely admit it, or suggest the highly-finite precious metal to other, lesser mortals.  One wonders if CYA has finally trumped personal wealth accumulation in the billionaire self-interest sweepstakes.

Now the biggest rock of all, the guy who hired Stanley Druckenmiller, the bête noir of Wall St., the man who legendarily once made one billion in a day: George Soros himself is going for gold.  This is clearly not a momentary trend; it’s the billionaires deserting the all-but-sinking ship.

 

Gary Christenson

The Deviant Investor

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