Gold Is Hot, Cryptocurrency's Not, According to These Two Experts

Source: Streetwise Reports   08/31/2021

With inflation on the rise and gold at $1,700 an ounce, now is a good time to invest in gold, billionaire hedge fund manager John Paulson proclaimed — and Mark Mobius, founder of Mobius Capital Partners, strongly agrees.

Today John Paulson is bullish on gold and bearish on cryptocurrencies, as he said during a recent “Bloomberg Wealth with David Rubenstein” interview.

Paulson went on to say that gold, now priced at about $1,700 an ounce, is a good investment.

“When it comes to one’s investment portfolio today, 10% of it should be in gold, and it should be physical gold,” concurs Mark Mobius, in a Bloomberg article. Mobius is a long-time investor, having worked 30-plus years at Franklin Templeton Investments and having founded Mobius Capital Partners.

“It is going to be very, very good to have physical gold that you can access immediately without the danger of the government confiscating all the gold,” Mobius was quoted as saying.

So why do Paulson and Mobius both strongly support this shift to gold? It’s because gold performs well during periods of high inflation, and we are in one. The best indicator of this, Paulson said, is the money supply, which was up about 25% last year.

Further, he believes that given the expanding money supply, we are in for worse inflation than predicted, higher than the 2% the Federal Reserve is targeting, he said.

“I think we have inflation coming well in excess of what the current expectations are,” he told Rubenstein.

Paulson explained that as inflation rises, investors move their money out of cash and fixed income and into gold. However, the amount of money being moved exceeds the quantity of investable gold, thereby causing a supply-demand imbalance. This inequity thereby causes gold to rise.

If you’re looking for another reason to embrace his recommendation for gold, Mobius noted the negative outlook for currencies worldwide.

“Currency devaluation globally is going to be quite significant next year given the incredible amount of money supply that has been printed” — and given the global governmental spend on fighting the COVID-19 pandemic, Mobius added.

Investing in bullion bucks the most recent trend of investors moving away from bullion-backed exchange-traded funds. During the last 12 months, the number of holdings in this type of investment dropped 8.5% as equities strengthened, Bloomberg data show.

As for the price of spot bullion, it now is about $1,816 per ounce. This compares to its peak of $2,075 an ounce roughly a year ago, when investors took flight to safe haven assets given the coronavirus. Since vaccines came online, however, bullion has pulled back some. Year to date it is down about 4%.

As for bitcoin and other cryptocurrencies, Paulson described them as “a limited supply of nothing” and says they are “lacking intrinsic value.” Despite where they are trading now, they will eventually become worthless, “once the exuberance wears off or liquidity dries up,” predicts Paulson.

“Cryptocurrencies are a bubble,” he added. “I wouldn’t recommend anyone invest in cryptocurrencies.”

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Disclosure:

1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor/employee. He/she or members of his/her household own securities of the following companies mentioned in the article: None. He/she or members of his/her household are paid by the following companies mentioned in this article: None. His/her company has a financial relationship with the following companies referred to in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with None. Please click here for more information. An affiliate of Streetwise Reports is conducting a digital media marketing campaign for this article on behalf of None. Please click here for more information. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

3) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

4) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.