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Thank The Fed? The World’s Billionaire Investors Are Buying Gold

Posted on by Tom Lewis
02
May

Economic uncertainty usually ensures an increase in the price of gold. While Wall Street has been enjoying a good ride, not everyone is expecting the stock market to continue its current upswing. Billionaire Naguib Sawiris, Egypt’s second richest man, has announced that he will be placing half of his net worth, which is a considerable $5.7 billion, into gold.

Sawiris is the chairman of Egypt’s largest telecommunication company, as well as an investor in foreign Mideastern markets, including North Korea, all of which have earned him a considerable profit.

He believes gold will rally to $1,800 an ounce, up considerably from its current $1,300 per ounce, while the stock market will lose considerable momentum due to global uncertainty. Mr. Sawiris may reap additional benefits than just a rise in gold prices. If President Trump can reach an accord between the two Koreas, Sawiris expects to see a return on his investments. He is the owner of North Korea’s first telecom company, Koryolink. At this time, the company’s revenues are not a part of Mr. Sawiris Egyptian Orascom Telecom Media & Technology Holding SAE. Peace between the two Koreas could change that. The recent meeting between North Korea’s Kim and South Korea’s Moon seem to point in the right direction. Mr. Sawiris is waiting for the results, perhaps not so patiently.  

While Mr. Sawiris has hopes for his North Korean investments, he has investments in many other countries. But his move to gold is an indication that he expects major changes ahead.

Sawiris is not alone. Many people look at Greece, Venezuela, Argentina, and Zimbabwe and see disaster looming globally due to this unprecedented debt binge. The winds are shifting, and many see gold as the natural anchor.

Jacob Rothschild, head of the banking family, indicated in 2016 that he is moving from the U.S. dollar, the current global reserve currency, into gold and non-U.S. currencies. The Rothschild family is wealthy enough to buy a few small nations for the sport of it. So, it’s well worth noting when they lose faith in the U.S. dollar.

Billionaire George Soros is the owner of Soros Fund Management LLC, with an estimated worth of $30 billion. Soros informed the Wall Street Journal in 2016 that, in his opinion, that economic weakness in China, including deflation, will cause a global downward spiral, including in the U.S., and that he is shifting toward gold.

How did we end up on the brink of a potential global financial disaster? Look no further than the global central banking system, which has been printing money and buying up bonds like a crazed chimp. While faced with negative interest rates, global banks have been trying to backtrack from these quantitative easing policies, but the damage has been done, and many countries are drowning in unprecedented debt. Negative interest rates are forcing depositors to pay banks to store their money rather than the banks paying depositors interest. How long will depositors and investors put up with this?

With the Petro-Yuan now officially launched, while at the same time accumulating as much gold as possible it seems China understands that the US could have its reserve currency status challenged. China’s ally, Russia, has also turned bullish on gold and has tripled its reserves since 2005. They have combined their efforts to dethrone the U.S. from its current position as the global reserve currency. And they may succeed.

The collective move of some of the world’s major investors toward gold could be a clear indication that the gold market is beginning to warm up again, while the dollar gradually depreciates. 


Another investor bullish on gold is Jeffrey Gundlach, CEO of Doubleline. He, too, sees the price of gold rising to $1,500 and beyond per ounce as the U.S. dollar continues its downfall spiral.

Kyle Bass of Hayman Capital also sees negative interest rates as unsustainable for any period, the fed has already indicated NIRP could be introduced in the next recession. Adding these concerns to the blooming global debt. The global central banks’ fiscal policy of easy credit and accumulating debt is likely to explode, making the rush toward gold a wise move.

David Einhorn, founder of Greenlight Capital, is joining Kyle Bass and Jeff Gundlach in banking on gold as a hedge against anticipated inflation due to economic uncertainties.

With the dominance of gold during chaotic economic times, it seems easy to delegate gold to the realm of economics. Until one recalls that Lenin, Mussolini, and Hitler made ownership of gold illegal upon their seizure of power. The power of gold is that it bestows liberty and freedom on those who own it. Which makes gold the primary nemesis of any aspiring dictator.

The father of billionaire Warren Buffett, Howard Buffett, understood the connection between gold and freedom when he stated, “In a free country the monetary unit rests upon a fixed foundation of gold or gold and silver independent of the ruling politicians. Our dollar was that kind of money before 1933. Under that system, paper currency is redeemable for a certain weight of gold, at the free option and choice of the holder of the paper money.

That redemption right gives money a significant degree of stability. The owner of such gold-redeemable currency has economic independence. He can move around either within or outside his country because his currency has accepted value anywhere.

To restate the Honorable Howard Buffet, when governments and tyrants deliberately devalue our money and reduce our wealth with fiat currency, they rob us of our freedom and reduce us to dependent serfs. You need only to remember German’s under Hitler burning worthless money for kindle. You need only read the policies of Lenin, who advised printing money as the means to control the economy and thus its citizens.

When we look around us, we see currency being devalued at a rapid rate through active and deliberate government policies, especially the policies of central banks. This is nothing less than theft. Look at once-prosperous Venezuela, where people are starving and dying from lack of medical care, thanks to a worthless bolivar that the government continues to print feverishly to devalue it even further.

A gold standard limits the power of the government and increases the freedom of its citizens because it forces the government to place an actual value on its currency. Gold knocks tyrants off their pedestal and puts the power back where it belongs – with the people.