New Found Gold Corp V.NFG

Billionaires seem to like gold

[megacopper]

John Paulson certainly likes gold. But he doesn't think too much about the crypto currencies. Lol  Actually that is the understatement of the year because he thinks they will eventually go to zero. Guys like this can see through all the BS that is going on and get down to the fundamentals. Basically in a nutshell he thinks gold is good, cryptos are bad. He made the right call with the subprime crash back in 2007 and 2008. Now he's saying to buy gold because of inflation.

https://www.bnnbloomberg.ca/billionaire-paulson-who-shorted-subprime-calls-crypto-worthless-1.1645666



 

After you made your famous trade, you bought a lot of gold, or gold futures, and you were called by some a gold bug. Gold’s now about US$1,700 an ounce. Do you think that gold is a good investment at this price?

Yeah, we do. We believe that gold does very well in times of inflation. The last time gold went parabolic was in the 1970s, when we had two years of double-digit inflation.

The reason why gold goes parabolic is that basically there’s a very limited amount of investable gold. It’s on the order of several trillion dollars, while the total amount of financial assets is closer to US$200 trillion. So as inflation picks up, people try and get out of fixed income. They try and get out of cash. And the logical place to go is gold. But because the amount of money trying to move out of cash and fixed income dwarfs the amount of investable gold, the supply and demand imbalance causes gold to rise.

So you’re a big believer in gold as a good investment now?

Yes. We thought in 2009 with the Fed doing quantitative easing, which is essentially printing money, it would lead to inflation. But what happened was while the Fed printed money, at the same time they raised the capital and reserve requirements in banks.

So the money sort of recycled. The Fed bought Treasuries, created money, which wound up in the banks and then was redeposited at the Fed. And the money never really entered the money supply. So it wasn’t inflationary. However, this time it has entered the money supply. The money supply was up about 25 per cent last year and the best indicator of inflation is money supply. So I think we have inflation coming well in excess of what the current expectations are.

What about cryptocurrencies? Are you a believer?

No, I’m not. And I would say that cryptocurrencies are a bubble. I would describe them as a limited supply of nothing. So to the extent there’s more demand than the limited supply, the price would go up. But to the extent the demand falls, then the price would go down. There’s no intrinsic value to any of the cryptocurrencies except that there’s a limited amount.

Cryptocurrencies, regardless of where they’re trading today, will eventually prove to be worthless. Once the exuberance wears off, or liquidity dries up, they will go to zero. I wouldn’t recommend anyone invest in cryptocurrencies.