Marc Faber, famed investment advisor, fund manager and publisher of The Gloom, Boom & Doom Report, noted in his October 2017 issue that the Fed’s announcement about implementing quantitative tightening has depressed precious metals and mining stocks. He then added, “I shall use the current weakness to increase my position in physical precious metals.”
A few months ago, Ray Dalio, manager of the world’s largest hedge fund with $160 billion under management, advised investors to put up to 10% of their investments in gold. He cited the geopolitical tensions between the U.S. and North Korean situation as well as domestic economic concerns.
June last year, former Fed Chairman Alan Greenspan was asked about the state of financial affairs in the U.S. He said, “This is the worst period, I recall since I’ve been in public service. There’s nothing like it, including the crisis — remember October 19th, 1987, when the Dow went down by a record amount 23 percent? That I thought was the bottom of all potential problems. This has a corrosive effect that will not go away. I’d love to find something positive to say.”
“If we went back on the gold standard and we adhered to the actual structure of the gold standard as it existed prior to 1913, we’d be fine. Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we’ve had in the United States, and that was a golden period of the gold standard. I’m known as a gold bug and everyone laughs at me, but why do central banks own gold now? I don’t know how it’s going to resolve, but there’s going to be a crisis.”
Since retiring as Fed Chairman, Greenspan has made other numerous positive comments about gold. However, as Chairman he contributed to today’s problems by creating massive quantities of money.
In May last year, George Soros, a legendary investor, and Stanley Druckenmiller, a famous hedge fund manager, went public with their bullishness on gold. They immediately were rewarded with solid price increases.
More recently, Thomas Kaplan, another billionaire who is chairman of the investment fund Electrum Group, said investors will make money on gold even if the world does well but “. . .won’t be carried out on a stretcher if any of the black swans show themselves.” Kaplan says that “. . . gold represents the best risk/reward ratio of any asset class today.”