Latest / Bloomberg Intelligence / Author Rickards on Soros' Gold Bet Amid Global Concerns (Audio)

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Author Rickards on Soros' Gold Bet Amid Global Concerns (Audio) · Bloomberg Intelligence

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  Speaker 1: reports after the bell Live on the First Breaking News
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  Speaker 1: desk on Bill Maloney. Charlie Hall, all right, thank you
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  Speaker 1: very much, Bill, and to hear live breaking news over
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  Speaker 1: your Bloomberg type squawk squ a w k on your terminal.
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  Speaker 1: I'm Charlie Peloton. Dat's Bloomberg Business Flash. You're listening to
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  Speaker 1: Taking Stock with Kathleen Hay and Pim Box on Bloomberg Radio.
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  Speaker 1: Gold investors piling into gold. It's up more than twenty
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  Speaker 1: this year. Mining stocks have gained even more. Let's find
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  Speaker 1: out more from Jim Rickarts. He is the editor of
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  Speaker 1: Strategic Intelligence Newsletter, and he is also the author of
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  Speaker 1: the New Case for Gold. Jim Rickarts, thank you very
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  Speaker 1: much for being with Usim tell us about George Soros,
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  Speaker 1: the billionaire investor, because in May he disclosed a nineteen
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  Speaker 1: million share steak in the world's largest gold producer, that's
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  Speaker 1: Barrack Gold. And also, just to compound it, double lined capitals.
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  Speaker 1: You know Jeffrey Gondlack, he has called for gold to
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  Speaker 1: reach fourteen hundred dollars an ounce that currently trades on
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  Speaker 1: the Comax at undred and seventy. Well, that's right the
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  Speaker 1: way I think about him. People always talk about the
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  Speaker 1: dollar price of gold. I actually, you know, when I
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  Speaker 1: invest in gold, I think of it by way. So
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  Speaker 1: there's so many else, there's so many kilos. If you're
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  Speaker 1: Kyle Best or Texas, Uh, you know, a pension fine
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  Speaker 1: you can buy a few times if you like, for
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  Speaker 1: a couple hundred million dollars. But a lot of people
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  Speaker 1: to even in dollars. They quoted in dollars. But so
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  Speaker 1: in that sense, the dollar price to goal is just
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  Speaker 1: the inverse of the dollars. So when you have a
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  Speaker 1: stronger dollar, you would expect a lower dollar price for goal.
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  Speaker 1: A weaker dollar means a higher dollar price for gold.
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  Speaker 1: So owning goal right here is basically a bet against
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  Speaker 1: the dollars, saying the dollar is going to get weaker,
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  Speaker 1: which it is if it has been tightening for three years. Um,
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  Speaker 1: they're going into an easy case. The dollar is going
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  Speaker 1: to weaken against the year in the end, and that
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  Speaker 1: means a higher price for goal. And I think Sorice
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  Speaker 1: is onto that. And you know San drooncon Miller and
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  Speaker 1: and other Hedghow managers are very very successful long turn
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  Speaker 1: shop records are making the same trade. Well. Of course,
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  Speaker 1: the tightening has been pretty slight from the FED gym,
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  Speaker 1: as you well know. And the question is now how
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  Speaker 1: much of at all they're going to raise rates anymore
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  Speaker 1: this year? But I want you to weigh in on
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  Speaker 1: Bill Gross's tweet today about negative interest rates. He says
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  Speaker 1: global yields lowest and five years have recorded history ten
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  Speaker 1: trillion dollars of negative rate bonds. This is a super
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  Speaker 1: nove of the explode one day. And it's interesting because
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  Speaker 1: I've been see to people lately. Are we all watching
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  Speaker 1: more and more yields go negative around the world and
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  Speaker 1: not realizing this is a signal of something bad brewing? Yah?
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  Speaker 1: I think actually all the rates in the world are
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  Speaker 1: going to zero or negative. I could see the tenure
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  Speaker 1: note going down to fifty basis points or seventy basis points.
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  Speaker 1: You know, a couple of years ago, the Japanese tenure
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  Speaker 1: j GUB was at seventy basis points, and people said,
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  Speaker 1: look how low that is. And of course now it's
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  Speaker 1: negative yield to maturity. So I see treasuries heading the
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  Speaker 1: same way. By the way, Cathn, I disagree about the
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  Speaker 1: said tightening. They've been tightening for three years since May
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  Speaker 1: two thousand thirteen, starting with the taper talk that Brnocchi
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  Speaker 1: gave that month. Then they actually started the taper in
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  Speaker 1: December two thousand thirteen. They then remove forward guidance in
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  Speaker 1: March two thousand and fifteen, spent all two thousands fifteen
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  Speaker 1: threatening to rays rate. It's finally got around to it. Well,
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  Speaker 1: they've tightened so much. How come yields are so low
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  Speaker 1: in the United States, Well, because this is a deflationary Basically,
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  Speaker 1: they shouldn't be tightening. They should be easy, and they have.
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  Speaker 1: The economy is probably heading into recession. You don't tighten
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  Speaker 1: and we us and you should ease in a recession.
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  Speaker 1: The time to tighten, By the way, it's two thousand
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  Speaker 1: and ten. They blew that. Now they're making two wrongs.
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  Speaker 1: Don't make it right, but they're they're I mean they're
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  Speaker 1: talking about tightening, but they basically because they've been tightening
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  Speaker 1: for three years, mostly with jaw bonning and playing with expectations,
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  Speaker 1: they've created a dollar shortage around the world and so
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  Speaker 1: it is deflationary. That's why yields are going down um
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  Speaker 1: and now. So the question is how do you get
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  Speaker 1: out of it that? Where do we go from here?
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  Speaker 1: What the way you get out of it is with
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  Speaker 1: a weaker dollar? This is just currency wars ONNEO one.
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  Speaker 1: So all the other channels are broken. There's there's no
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  Speaker 1: physical stimulus because there's no political consensus. They can't make
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  Speaker 1: structural reforms for the same reason. Monetary policy is pretty
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  Speaker 1: much out of gas, and so the currency wars are
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  Speaker 1: basically the only way to create similar because it doesn't
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  Speaker 1: do anything for the world. It can help a particular
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  Speaker 1: economy or country briefly until it flips the other way.
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  Speaker 1: It's not doing anything for world growth. But right now
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  Speaker 1: US and China are trying to get a little lift
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  Speaker 1: with a weaker currency, and that means a stronger dollar,
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  Speaker 1: stronger hero, and stronger goal. I'm pretty stronger, yeah, I
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  Speaker 1: bespoke a stronger ye and stronger euro and stronger vot Jim.
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  Speaker 1: If people follow this strategy, what are the tactics? Tell
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  Speaker 1: us should you invest in Newmont Mining, Freeport mcmaran, the
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  Speaker 1: Spider Gold Trust, the Direction Daily Gold Miners Index, bull shares?
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  Speaker 1: What what should you invest in? My preference is physical goal,
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  Speaker 1: but I don't like so called paper goal, whether it's comics,
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  Speaker 1: futures et s or London Bullion Market Association on account
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  Speaker 1: allocated forwards because when the price of gold super spikes,
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  Speaker 1: when it really goes up, when you really want your goal,
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  Speaker 1: all those contracts are going to be terminated. They we'll
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  Speaker 1: give you a check for your profits as a closed
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  Speaker 1: business yesterday, but you won't participate in the rally going forward. However,
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  Speaker 1: if you do want mining shares, they recommend some of
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  Speaker 1: the smaller miners because their takeover candidates a company like Barrack.
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  Speaker 1: With the price of goal going up, it's easier for
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  Speaker 1: them to buy a junior miner than it is to
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  Speaker 1: go out and do a development study and explore completely
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  Speaker 1: new fields. I mean they'll do both, but a lot
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  Speaker 1: of these um UH six cecil the junior miners are
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  Speaker 1: very good takeover candidates right now. So you're getting a
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  Speaker 1: pop on gold and you're getting another pop on the
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  Speaker 1: takeover premium. Alright, Jim McCords, thank you so very much
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  Speaker 1: for joining us to talk about how gold is a
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  Speaker 1: winner in a world where bonds are rallying more and more,
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  Speaker 1: yields are turning negative and as he says, the ft
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  Speaker 1: has been tightening in many ways, says as could it
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  Speaker 1: a dollar shortage, that too is good for gold. We
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  Speaker 1: thank you Records, editor of Strategic Intelligence Newsletter, author of
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  Speaker 1: the New Case for Gold. I'm Kathleen Hayes along with
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  Speaker 1: Pim Fox, and this is taking Stock on Bloomberg Radio Bloomberg.
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