Davos 2010: George Soros warns gold is now the 'ultimate bubble'

[jtabeb]

NOT!

Read the headline, then read Soros' comments. Notice anything fishy? (As in the headline implies the opposite of the quotes by Soros)

http://www.telegraph.co.uk/finance/f...te-bubble.html

the 'ultimate bubble'

Gold is now "the ultimate bubble", billionaire investor George Soros has declared, sparking fears that prices for the precious metal may soon suffer a tumble.


By Edmund Conway in Davos
Published: 6:15AM GMT 28 Jan 2010
Comments 27 | Comment on this article




Link to this video

Watch the above CNBC interview with George Soros
Mr Soros, arguably the most famous hedge fund manager in history, warned that with interest rates low around the world, policymakers were risking generating new bubbles which could cause crashes in the future. In comments delivered on the fringe of the World Economic Forum, Mr Soros said: "When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold."

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Gold prices last month reached a record level of just over $1,225 per ounce, having risen around 40pc last year. Investors are piling into the metal amid fears both of potential inflation and fading faith about the stability of previously-assumed safe assets such as government debt. However, the chairman of Barrick Gold, the world's biggest producer, Peter Munk, said he expected the metal's upward march to continue.
Mr Soros added that by proposing imminent "exit strategies" from the unprecedented support handed out to troubled banks and consumers, governments around the world could be in danger of triggering a double-dip in the global economy. In comments which will reinforce Labour's plan to fight the next election on promises not to start raising taxes or cutting spending too soon, he said that it was still too early to slash budget deficits.
He said: "I think that since the adjustment process to the recession is incomplete, there is a need for additional stimulus. Some countries, like the US and European countries, have plenty of room to increase their deficits. The political resistance to doing so increases the chances of a double dip in the economy in 2011 and after that."
The Conservatives have pledged to start cutting public spending almost immediately after this year's election, but their promise was weakened earlier this week by an International Monetary Fund report warning that it may still be too early to begin this process. Mr Soros also came out in favour of Barack Obama's plan to split up large US banks, but said that proposals to tax the banking system could also endanger the recovery.

[medved]

Re: Davos 2010: George Soros warns gold is now the 'ultimate bubble'

NOT!

Read the headline, then read Soros' comments. Notice anything fishy? (As in the headline implies the opposite of the quotes by Soros)

http://www.telegraph.co.uk/finance/f...te-bubble.html

the 'ultimate bubble'

Gold is now "the ultimate bubble", billionaire investor George Soros has declared, sparking fears that prices for the precious metal may soon suffer a tumble.


By Edmund Conway in Davos
Published: 6:15AM GMT 28 Jan 2010
Comments 27 | Comment on this article

Gold prices last month reached a record level of just over $1,225 per ounce, having risen around 40pc last year. Investors are piling into the metal amid fears both of potential inflation and fading faith about the stability of previously-assumed safe assets such as government debt. However, the chairman of Barrick Gold, the world's biggest producer, Peter Munk, said he expected the metal's upward march to continue.
Mr Soros added that by proposing imminent "exit strategies" from the unprecedented support handed out to troubled banks and consumers, governments around the world could be in danger of triggering a double-dip in the global economy. In comments which will reinforce Labour's plan to fight the next election on promises not to start raising taxes or cutting spending too soon, he said that it was still too early to slash budget deficits.
He said: "I think that since the adjustment process to the recession is incomplete, there is a need for additional stimulus. Some countries, like the US and European countries, have plenty of room to increase their deficits. The political resistance to doing so increases the chances of a double dip in the economy in 2011 and after that."
The Conservatives have pledged to start cutting public spending almost immediately after this year's election, but their promise was weakened earlier this week by an International Monetary Fund report warning that it may still be too early to begin this process. Mr Soros also came out in favour of Barack Obama's plan to split up large US banks, but said that proposals to tax the banking system could also endanger the recovery.

I don't always agree with Jim Sinclair, sometimes he wanders into some lala land, but in this case, IMHO, he is right on:

"Today I have received many emails concerning Mr. Soros’ dislike of gold. You may have noticed that Mr. Buffett and Mr. Soros seem to be in a PR contest for the position of spokesperson for the future of the USA.

Many Americans erroneously see gold as anti-American and those that do not see a major future for the US dollar as traitors.

You will recall Mr. Buffett’s recent entry into the railroad business was deemed by him and others as being a vote of absolute confidence in America’s continued economic recovery and its sustainability. It is sort of a quasi-competition for economic President of the USA. I file his bearishness as what he sees as a patriotic position.

Nobody can jawbone the gold market for more than a very short term period." ;)

http://jsmineset.com/2010/01/28/the-...sidency/print/

[charliebrown]

Re: Davos 2010: George Soros warns gold is now the 'ultimate bubble'

No Mr. Soros ... the biggest bubble is Long U.S. bonds. Think about it, why would you loan the gvt, or anybody money for 20years at 4%,

and two, Mr. Buffet bought Wells Fargo pre crash didn't he?? Without the Gvt backstop of the entire banking system and mortgage mkt, WF would be toast. So the Oracle of Omaha didn't see it coming.

[Camtender]

Re: Davos 2010: George Soros warns gold is now the 'ultimate bubble'

No Mr. Soros ... the biggest bubble is Long U.S. bonds. Think about it, why would you loan the gvt, or anybody money for 20years at 4%

LOL, that sounds like Jim Rogers - almost verbatim. I have a feeling that Rogers is going to have better investment returns as a percentage this decade than Soros, IMO.

At then end of the day, it does not matter what Soros, Buffet or anyone else in the US thinks about gold. What matters the most is what the US creditors think about gold and their perception/confidence of the value of US paper IOUs. Also, the emerging economies that hold large amount of US debt seem to have a culture (or getting one) for gold too (think India and China).

[pianodoctor]

Re: Davos 2010: George Soros warns gold is now the 'ultimate bubble'

I don't understand what is different about what Soros is saying and what iTulip predicts. I thought we are expecting a gold bubble- and figuring to get out at some strategic point (incorporating guidance from EJ) before it collapses again.

[Camtender]

Re: Davos 2010: George Soros warns gold is now the 'ultimate bubble'

I don't understand what is different about what Soros is saying and what iTulip predicts. I thought we are expecting a gold bubble- and figuring to get out at some strategic point (incorporating guidance from EJ) before it collapses again.

I disagree.
Soros says "ultimate bubble", in such a manner which to me implies more of a caution investmetn sign than opportunity. However, Soros is wrong. If world history has taught us that all fiat currencies will go to zero vs. gold (that will never go to zero value) how can something that can never got to zero be the "ultimate bubble" when compared to fiat currencies, just look at $1,000,000,000,000's of US debt floating around out there. If if gold goes to $100, it still has some value, right? Looks to me like faith back currencies are the "ultimate bubble" right now. But we are not true gold bugs, we are selling when we (or EJ) thinks the time is right and hopefully we can catch that next bubble up (energy, natural resoruces).

See that last group of people holding gold, we don't want to be them.

[EJ]

Re: Davos 2010: George Soros warns gold is now the 'ultimate bubble'

Regret I've been so scarce here lately. Final deadline on the book is tomorrow, and I'm on it.

The fact that Soros even mentions gold at Davos is suggestive. Imagine he's at Davos in 1998, during the Asian currency crisis, uttering the word "gold" there then. The preeminence of the dollar as safe haven was assured, and only madmen and goldbugs thought otherwise.

The best way to damn gold is to ignore its rise and pretend that it didn't beat the S&P for the last decade. Why has Soros stopped ignoring it and brought it front and center at Davos?

It's a message that reinforces our theory of the course of events.

When, eventually, we do sell gold we bought in 2001 it will not be to buy a dollar denominated asset. The dollar, as the underlying unit, will have been replaced by something else. If you can figure out what that is before anyone else, you can make some money. Soros is the master of that game.

[WildspitzE]

Re: Davos 2010: George Soros warns gold is now the 'ultimate bubble'

currencies begin @1:34 ... SDR @3:41ish

[WildspitzE]

Re: Davos 2010: George Soros warns gold is now the 'ultimate bubble'

I don't always agree with Jim Sinclair, sometimes he wanders into some lala land, but in this case, IMHO, he is right on:

"Today I have received many emails concerning Mr. Soros’ dislike of gold. You may have noticed that Mr. Buffett and Mr. Soros seem to be in a PR contest for the position of spokesperson for the future of the USA.

Many Americans erroneously see gold as anti-American and those that do not see a major future for the US dollar as traitors.

You will recall Mr. Buffett’s recent entry into the railroad business was deemed by him and others as being a vote of absolute confidence in America’s continued economic recovery and its sustainability. It is sort of a quasi-competition for economic President of the USA. I file his bearishness as what he sees as a patriotic position.

Nobody can jawbone the gold market for more than a very short term period." ;)

http://jsmineset.com/2010/01/28/the-...sidency/print/

Yup. It’s not that it’s patriotism per se, but patriotism as a tool to be heard and considered in the conversation.

From my experience in dealing with his organization in the EM (specifically Arg, Bra, and Mex), his public statements are reflective of very deep and broad conversations that are taking place b/w decision makers and his organization across multiple levels.

The deals I’ve seen are not quick trades, but are investments that will pay off after or due to systemic changes that his organization attempts to mold at multiple levels, including the national / supranational dialogue. A strategy / investment thesis is developed by him or his subordinates (with his ultimate approval), once the thesis is fleshed out then the gears are put into motion. The idea is to position his investments so that once the structural change is affected, the investment benefits from first mover advantage (and/or is the infrastructure for such change). The public statements are part of the process to affect these changes. He is usually brought in, depending on the situation, to seal the deal. His presence tends to impress politicians and/or decision makers.

[bill]

Re: Davos 2010: George Soros warns gold is now the 'ultimate bubble'

Real Assets
http://www.youtube.com/user/Bloomber.../1/KrmX7C5D9IQ

[jtabeb]

Re: Davos 2010: George Soros warns gold is now the 'ultimate bubble'

Regret I've been so scarce here lately. Final deadline on the book is tomorrow, and I'm on it.

The fact that Soros even mentions gold at Davos is suggestive. Imagine he's at Davos in 1998, during the Asian currency crisis, uttering the word "gold" there then. The preeminence of the dollar as safe haven was assured, and only madmen and goldbugs thought otherwise.

The best way to damn gold is to ignore its rise and pretend that it didn't beat the S&P for the last decade. Why has Soros stopped ignoring it and brought it front and center at Davos?

It's a message that reinforces our theory of the course of events.

When, eventually, we do sell gold we bought in 2001 it will not be to buy a dollar denominated asset. The dollar, as the underlying unit, will have been replaced by something else. If you can figure out what that is before anyone else, you can make some money. Soros is the master of that game.

Sure! (But what are you going to do with your DOLLARS, and when?)

[metalman]

Re: Davos 2010: George Soros warns gold is now the 'ultimate bubble'

Real Assets
http://www.youtube.com/user/Bloomber.../1/KrmX7C5D9IQ

he didn't say anything. take the blanket off his lap. put it over his head.

[hayekvindicated]

Re: Davos 2010: George Soros warns gold is now the 'ultimate bubble'

Regret I've been so scarce here lately. Final deadline on the book is tomorrow, and I'm on it.

The fact that Soros even mentions gold at Davos is suggestive. Imagine he's at Davos in 1998, during the Asian currency crisis, uttering the word "gold" there then. The preeminence of the dollar as safe haven was assured, and only madmen and goldbugs thought otherwise.

The best way to damn gold is to ignore its rise and pretend that it didn't beat the S&P for the last decade. Why has Soros stopped ignoring it and brought it front and center at Davos?

It's a message that reinforces our theory of the course of events.

When, eventually, we do sell gold we bought in 2001 it will not be to buy a dollar denominated asset. The dollar, as the underlying unit, will have been replaced by something else. If you can figure out what that is before anyone else, you can make some money. Soros is the master of that game.

It is a question of timing. Is gold already a bubble or will it become the ultimate bubble? A bare reading of the fundamentals tells me that gold is not a bubble - yet. But my contrarian instincts look at the price which is up 4.5 times in 10 years and that spooks me a little. Gold has outperformed everything in the last decade. This makes me weary.

I am not buying any more gold. I am done.

[thunderdownunder]

Re: Davos 2010: George Soros warns gold is now the 'ultimate bubble'

Not everything - there are pockets of sanity, these are not traded on main markets that are now clearly "man" -ipulated.
Please do not ask me to explain -tis enough to know that some things are publicly traded and some things just appreciate and are wanted quietly because of rarity.
BTW Gold is the anvil on which currencies are judged - interesting read from a numismatic jail bird in Fort Dix. I swear he is either mad or singularly the most intelligent man I have read - I think the latest is a guide for you gold bugs (Hint)
The Author of Screambucket.com (I believe to be a member of I tulip) on the other hand is cold hard fact without predictions. Cold, hard and focused on the now. I commend him to all.

PS: I really miss Lukester and his rapier wit. What is life without a little blood spilled on the field of Rugby. (yes it is the game played Gods who fear nothing) Grid iron is for Girls with padded bras.

[llanlad2]

Re: Davos 2010: George Soros warns gold is now the 'ultimate bubble'

When central banks have stopped buying it will be the time to sell. They only started buying last year and have a long way to go in my opinion. When France started buying in the 1960s, leading to the collapse of the previous monetery system, it took at least 10 years for the top to be made.

Stephen Jen, amanaging director at hedge fund BlueGold Capital and an expert on sovereign wealth funds from his days at Morgan Stanley, estimates that the percentage of gold held by the Chinese, Indian and Russian central banks is just 2.2 percent. This compares with 38 percent held by Western central banks. According to Jen, they would have to buy $115 billion dollars worth of gold at current prices to raise their bullion to just 5 percent of total reserves, and $700 billions' worth to reach just half of Western levels