Skip to comments.John Paulson's Scary Speech: Double Digit Inflation By 2012, Gold At $4,000
Posted on 09/28/2010 12:34:11 PM PDT by blam
John Paulson's Scary Speech: Double Digit Inflation By 2012, Gold At $4,000
Sep. 28, 2010, 2:51 PM
John Paulson scared the pants off of a packed audience at New York's University Club recently as he warned them of huge changes in the economic environment in the years to come.
Forbes' Bob Lenzer reports Paulson's saying:
If you dont own a home buy one."
If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.
Paulson has been bullish on housing for a while now (he runs a housing recovery fund), but this is him hitting super-bull territory. His reasoning is that home prices are great, the bond market is dead, and commodities like gold, which he also has a big prediction for, are on the rise.
According to InfoWars, he told the audience that he thinks the price of gold will hit $2400-$4000. And a whopping 80% of his assets are in gold.
Given his expectation for further money printing by the Fed and that in 1980 the gold price rose by 100% more than the correlation implied Paulson noted that the price of gold could hit $2,400 based only on monetary expansion, and as high as $4,000 per ounce based on a projected overshoot.
Lastly, he noted that 80% of his assets are denominated in gold.
Paulson sees coming:
* Low double-digit inflation by 2012, killing the bond market, and restoring strength to equities and gold.
* 2% GDP growth for 2011 and 2012
* Gold hitting $2,400 to $4,000
It's worth noting that if gold goes to $4,000, Paulson will be a top contender for the richest man in the world.
(Excerpt) Read more at businessinsider.com ...
you are wise, grasshopper
who are all those gold hoarders going to trade with?
maybe people who have food, toilet paper, and whiskey to sell
blessed are the cheesemakers
buy booze - poor man’s gold- and you can drink it whether inflation hits or not
Or just pay off the fixed debt with the double-digit inflated dollars....
I don't know what to believe anymore.
I gave you a reason why you might be confused. If you don't want feedback, you probably shouldn't post threads. If you don't want people to comment on your statements, you probably shouldn't make them in a place where the purpose is to have people comment.
My comment was a direct response to your comment, explaining why I thought you were confused. I know I'd be confused if I got all my market advice from the sources you keep posting.
Actually, with today's interest rates it would be crazy NOT to go deeper into debt if double-digit inflation is coming.
Hence the gold I own now, some of which is converted to inflated dollars to pay off the debt.
Ah, he’s the guy that got all the money that everybody else lost betting that housing would never go down.
He’s having a bad year, from what I understand, except his gold investments have done OK:
“FORTUNE — It’s tough to be the king. John Paulson, current monarch of hedge funds, is having a challenging year, according to recent press reports. Bloomberg News recently reported that Paulson’s $9 billion Advantage fund was down 5.8% in the first six months of the year. His Advantage Plus fund was down 8.8%. And while his Recovery fund was reportedly up through June, it suffered a 12.4% decline that month. The lone bright spot: his gold fund, up 13% for the year.”
But that’s the nature of contrarian bets. You only need to hit a couple of times and it won’t matter how often you fail.
It will be interesting to see if housing really is at bottom and ready to shoot up, or not. I guess the point is that if inflation is about to run wild, it’s good to own physical assets like housing. Or cans of food.
No thanks...I have enough already and there might not be an inflation. Right now I'm up about 40% with the gold which ain't bad and I'll probably sell it all if it gets to 2000.00 because I can't predict the future.
Thanks for making my point.
Everyone is talking like massive inflation is coming, but nobody is actually acting like it.
Right now I'm up about 40% with the gold which ain't bad and I'll probably sell it all if it gets to 2000.00 because I can't predict the future.
Adjusted for inflation, the folks who bought gold in January of 1980 would still be in the hole at $2k an ounce.
I think it's entirely possible that the current gold market is about to be exposed as the biggest scam in history. Nearly all gold bought and sold today is certificates, most people are just taking someone's word that the gold exists. And gold is very easy to buy, yet we're told it's rare -- the irony is that it really can't be both. If gold is as rare as they claim, brokers shouldn't be able to even come close to meeting demand.
Well I certainly did not buy in 1980 and only a short time ago and only a small amount. I had a little extra due to a death in the family and was first going to buy GE stock, which I had owned in the past when it was doing well. I’m very glad I chose the gold for now.
Don’t get me wrong, I’m not criticizing you (I own some gold as well). But I’m also worried about the gold market overall.
On the one hand, it’s odd to see both supply and demand so high, especially with the fact that NOBODY can actually say how much there is; I can do research and in a couple seconds figure out how many shares of outstanding stock there are in a XZY Corp. and it’s easy to verify that a stock certificate is legitimate, but that is impossible with gold. It’s entirely possible that a lot of the gold that has been bought the past few years is nothing more than worthless paper.
On the other hand, look at diamonds, it is an accepted fact that the supply of gem-quality diamonds FAR EXCEEDS what is in circulation. But it’s controlled by a cartel and they have a vested interest in keeping supply down, because demand is fairly predictable. But what if demand for diamonds were to skyrocket in a short period and they just decided to flood the market at the highest prices ever? The diamond cartel could effectively cash out and people would own a lot of beautiful diamond jewelry that was now worth a fraction of what they paid for it. What if world supplies of gold are 50 or a 100 times what people believe and a consortium has been hording it for a century or more? What happens then?
You can’t sell them?
This is your whining earlier today on another thread I posted. If you so hate the sites that I post from, why do you show up and often start whining?
Why don't you get off your butt and post something yourself?
Your whining is adolescent and irritating, like a little girl.
Yes, that was a post from a different thread, about a different article you posted. It was a comment about the article you posted, based on a comment I read at the site you linked.
Again, if you don’t want people to make their own opinionated comments about what you post, you probably should not post them to a site that exists for people to make comments about what you post.
As to why I don’t post things, I do when nobody else has posted a story that I find interesting and that seems to be in line with the express purpose of this site to advance the conservative cause.
We certainly don’t need more people posting for the sake of posting — I think you are doing a fine enough job at that for at least a dozen freepers.
It’s almost a shame they can’t give you a tool that would just let you hit a button and post every article from the blogs you follow — I imagine it takes you a bit of time to enter each of them every day.
BTW, I don’t understand why you would be upset about my attacks on some web site you post information from. It’s not like I’m attacking anything you are saying, right?
It’s not like it’s your web site, or that you are the author of the stuff I am ridiculing. You are just the person who posted it so we could discuss it.
As to your comment “If you so hate the sites I post from”, well I hate the New York Times, but that doesn’t stop freepers from posting things from the NYTimes, or me from commenting about how stupid the people are that write for the NY Times.
In fact, most of the political postings around here are from people and sites we dislike, and we all mock the postings and the papers and whatever else we feel like mocking.
Which again makes me wonder why you think that nobody should mock the stuff you post, or why you are so upset that I choose to hold a negative opinion about the value of what the people say in some of the articles you post.
not exactly correct
although gold could move from $1300 to $4000, and the dollar had devalued thereby resulting in radically increased prices for everything. this would mean that gas would jump from $2.50/gal to about $7.50/gal. then again, salaries could jump from an average of $50,000/yr to roughly $150,000/yr. all this due to the radically reduced value of the dollar.
of course, fixed debts secured PRIOR to the inflation would not change.
thus, if you were to grab a 30 yr note NOW for $500,000 @ 5%, you would be paying $2,684/mon. this might seem tough when only making $50,000/yr now, or about $4,166/mon. but if your salary were to increase with inflation, it would be around $150,000/yr, or $12,500/mon. this would make paying your fixed rate mortgage fairly simple.
all assuming you could still find work as companies would be struggling to find enough capital to operate.
which is when the problems really start...
Or what happens if someone discovers a huge new supply of gold somewhere? Or develops a better way of mining that makes it easy to extract gold from mines that were otherwise abandoned as unprofitable (especially since if the price goes up, those unprofitable mines can be profitable again).
I would tend to doubt anybody could keep a huge supply of gold secret. They haven't really kept the diamond supply secret, they simply have an iron fist on everybody who could possibly get to the raw diamonds, and I'd hate to be the person who tried to break that embargo.
salaries will not keep up with inflation, especially on the lower end where it will lag greatly
whoa, you really seem like a flat earth type.
people that buy gold, often resell all or portions of it. this is not uncommon.
as for being able to keep up with demand... that is why the price is $1300 per ounce. a single coin is now valued at $1300. not because some 'evil rich guy' says so, but because of supply and demand. the demand is up, therefore the price goes up as the supply is finite.
also, please, at least read the wiki before spouting: wiki: gold
from the wiki:
"A total of 165,000 tonnes of gold have been mined in human history, as of 2009. This is roughly equivalent to 5.3 billion troy ounces or, in terms of volume, about 8,500 cubic meters, or a 20.4m cube."
that's about 5.3 billion 1 ounce gold coins, which would be worth $6.9 trillion today. more than enough to handle consumer demand (big banks and government buyers are the ones pushing the value of gold up as they scamper to unwind their dollars into something more stable/secure)
You say the same thing everyday about the same sites...as if no-one read it yesterday or the day before.
After a while it seems the intent is to disrupt.
Why not let the reader make his own judgement about the quality of the article or the publishing site?
Jim Rogers was saying over a year ago that there were going to be food shortages and commodities were going to be precious. He also recommended buying farmland and just recently another money guy was recommending the same thing.
I’ve been watching the commodities lately and it is amazing how much they have gained but I don’t know if it is money games or if companies are actually taking delivery of the product.
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