Wednesday , 24 July 2024

Latest Comments By Jim Rogers, John Paulson & Jeremy Grantham On Gold (+2K Views)

Gold is known as a solid inflation hedge, and could earn this reputation in 2013 if inflation picks up. Below are three well-known gold bugs and their bold predictions for investing in gold next year and beyond. Words: 525

So says Ryan Fuhrmann ( in edited excerpts from his original article* posted under the title 3 Gold Price Predictions For 2013. 

Lorimer Wilson, editor of (Your Key to Making Money!), has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.

Fuhrmann goes on to say, in part:

The Federal Reserve’s stated mission is to provide “the nation with a safe, flexible, and stable monetary and financial system.” This has historically meant doing its best to keep inflation levels stable and low. It has achieved this goal for more than two decades now, but has decided to shift its focus a bit toward increasing the pace of economic growth. Other central banks across the globe have a similar stance, and this is worrying a number of market experts that it could eventually lead to high inflation.

Jim Rogers

“I am not selling my gold and silver…gold and silver will both go much, much higher over the course of the bull market.”

In the above quote, Rogers appears to be arguing that strong stock market returns will support higher gold prices, not so much because stocks are moving higher but because the potential exists for a market correction if and once the market falls. Rogers has been highly critical of expansionary monetary policy, which increases the money supply and can lead to asset bubbles, such as the stock market. [Also read: Jim Rogers: Situation to Worsen in U.S. and Lead to Social Unrest]

Jeremy Grantham

“As inflation picks up, the real price of gold goes up.”

Jeremy Grantham, who heads firm GMO that runs $97 billion in client assets, wrote the above in a Forbes article, also referenced the well-known Credit Suisse Global Investment Returns Yearbook that explained gold can be a great hedge against inflation. It attributed this to the simple fact that investors turn to gold during times of uncertainty and that this expectation becomes a self-fulfilling prophecy, meaning that this increased demand drives gold prices up. Interestingly, the study found that investing in stocks also offers an inflation-hedge and that stock returns have far outpaced gold returns over time. However, both asset classes have appeal during periods of inflation.

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John Paulson

“By the time inflation becomes evident, gold will probably have moved, which implies that now is the time to build a position in gold.”

So far in 2012, Paulson has invested rather aggressively in gold-related assets, including buying the shares of gold miners and producers, as well as investing directly in the SPDR Gold Trust [Read: John Paulson Now Has 44% of His Hedge Fund’s Assets in Gold Stocks/ETFs! How Much Do You Have?]. His arguments echo that of both Rogers and Grantham in that he expects gold to rise if and once inflation accelerates, which could occur because of easy money thanks to expansionary monetary policy.

Bottom Line

It’s important to note that these investors aren’t making a specific call that inflation will increase in 2013. They just expect it to accelerate at some point going forward. It could be as soon as 2013, or beyond that, though there is also of course the possibility that inflation levels don’t pick up that much at all.

*Source of original article:

Editor’s Note: The above post may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

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One comment

  1. For the average investor looking to protect their assets from further erosion, I believe that precious metals should be a important part of their financial planning!

    If the dollar loses half it’s buying power/value what percentage of todays holding would wish you had converted to precious metals?

    Hopefully, that will give you a starting point as to how to plan ahead!

    For most investors, probably a third of their money continually stays “in the bank” and is not being used actively…