Last week we reported that the mainstream is turning bullish on gold, and in recent months, a number of prominent investors including Paul Tudor Jones, Thomas Kaplan and David Roche have all talked up the yellow metal. This week, we have another well-known veteran investor saying buy gold.
During an interview with Bloomberg, Mark Mobius said that at this point investors should buy gold “at any level.”
I think gold long-term prospect is up, up, and up.”
Why is Mobius bullish on gold? As he put it, central banks are going to be printing lots of money in the near future.
The reason why I say that is the money supply is up, up, and up. You know, with the efforts by these central banks to lower interest rates they’re going to be printing like crazy.”
The Federal Reserve cut rates for the first time in over a decade last month. Powell tried to downplay the move, insisting it wasn’t the beginning of a long rate-cutting cycle. Peter Schiff said that’s true – only because it won’t take long to get to zero.
[Jerome Powell] is trying to pretend it’s because of concerns about the overseas economy. It is really the US economy that is driving the Fed. That’s why this is just the first step on the road back to zero. And you know, it was a mistake when the Fed went back to zero the last time; it’s going to be an even bigger mistake when they do it next time. And they’re also going to go back to quantitative easing. You know, they announced yesterday the end of quantitative tightening, but the next step is to go back to QE, and QE 4 is going to be bigger than QE 1, 2 and 3 combined.”
The Fed isn’t alone on the path toward more monetary stimulus. In an interview with the Wall Street Journal, Finnish central bank governor Olli Rehn raised the prospect of new easing measures from the European Central Bank. He said, “It’s important that we come up with a significant and impactful policy package in September. When you’re working with financial markets, it’s often better to overshoot than undershoot, and better to have a very strong package of policy measures than to tinker.”
During the Bloomberg interview, Mobius also addressed the proliferation of cryptocurrencies. He said he believes the rise of bitcoin and other cryptos will actually be good for gold.
You have all these currencies, new currencies coming into play. I call them ‘psycho currencies,’ because it’s a matter of faith whether you believe in Bitcoin or any of the other cyber-currencies. I think with the rise of that, there’s going to be a demand for real, hard assets, and that includes gold because gold can play a role not only as an asset but also as a currency.”
Mobius said investors should have at least 10% of their portfolio in gold.
“I’m talking about physical gold,” he said.
Peter Schiff has been advising this for a long time. Currently, only about 1% of the world’s investable capital is in gold. Peter has said it would be wise to make the move sooner rather than later.
If the idea goes mainstream, and all investors go to a 10% gold allocation, the price will skyrocket. Investors need to move quickly to get ahead of the crowd.”
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GOLD….GOLD…beautiful gold……..
Take Helicoptor Ben Bernank’s advice and GIT-U-SOME as a tail hedge.
I likes it. ALOT.
No one needs to tell you to buy a hot commodity. If these guys thought gold was going to the moon then the last thing they’d do is to tell you about it. I own some as a hedge against inflation and some silver too. I recommend that everyone own some but buying out of fear is the wrong strategy.
Nickel- I bought most of mine at $240 oz, some at $800, would buy on a dip now if the dip was sizeable. There is a difference in a tail hedge and a inflation hedge but both are good reason to buy-U-some.
Gold & Silver…best sleeping pills I have ever owned.
Been stacking Silver since 83…then managed some wealth and started stacking Gold since 99.
Only mistake I have made is not taking enough profit during the 2010/11 peak, but I was flush, and I believe those highs will be surpassed in the next year, two or three.
As usual the dumbed down American herd will stampede late or too late as the cowboy Banksters startle them with gunfire in the dark, towards a cliff they don’t even know is waiting for them on the edge of panic at the top of mount harsh reality.
Best book about PMs I have read to date…the chapter on when to sell is worth buying the book. I and the author are the same age, but he is much smarter than me, learned a lot. A witty read as well.
Mark, if not too personal a Q here on a public forum, do you own shares in any jr. explorers, mining co.’s, or royalty funds?
Answer by email, if so inclined.
I just looked at prices from Jan. 2016 to current.
Notables:
FNV;
RGLD;
AEM;
EGO;
WPM; and
SSRM
All doubles since ’16, w a couple near or eclipsing 3-bagger status.
AuGee,
I never have bought any…but those type of gains and losses (and much more) both ways are common.
I have been fortunate, careful, and wise in the timing of all my equity investments, especially taking profit in 99 and going big into PMs. I also didn’t go back into stocks until 2102 and got back out at the end of 2014 (always out of the market early and back in late) but missed all the crashes of my life. Have been extremely happy with what I would call a slightly upper middle class debtless life…and just don’t want or need any roller coaster risk or reward. I’m a tortoise in the money race.
Early on I was going to risk 2k in Bit Coin…was just about to buy it but at the last minute I went with a couple ounces of Gold instead.
At this stage of life and what I think is coming I’m into all hard assets…period. My wife has a sizable 401k in short term treasuries and we have some other cash that is going into a second home we will soon be building.
Go for it…I would just invest what you’re willing to loose without anything serious happening to your life if the stock/company goes in the tank.
Thx 4 your feedback, Mark.
I window shopped many times, but never bought.
The royalty companies seem like the safest for risk tolerance.
Anyway, I appreciate you taking the time to respond.
Computers frequently, but not 100% all the time have gold locked into USD value. USD value grinding up a bit may be due to the scared money coming to the USA our of Asia and the EU. Armstrong notes on USA rates from Asia to investigate their CRISIS first hand. Hong Kong riots getting bigger.
never buy anything at any price….that’s a great way to go broke real quick….buy low, sell high.
Gold correlation to what reviewed by Mish. Good info and charts.
https://moneymaven.io/mishtalk/economics/gold-is-not-a-function-of-the-us-dollar-nor-is-gold-an-inflation-hedge-2mIh3JA-xUO0WJrDPy-tzA/