Friday, August 3, 2012

More Propaganda That Keynes was a Great Investor

As I have pointed out before, John Maynard Keynes made most of his investment money by trading on inside information based on advance knowledge about government actions to be taken.

Bloomberg is out with an interview today with David Chambers, who has been pushing the myth of Keynes as a great investor. What I find particularly fascinating is that Chambers fails to mention in the interview that in the early 1930s, Keynes had more than 65% of his portfolio in gold stocks. Instead, Chambers blabbers on about some auto stock Keynes owned. But not a mention of the overwhelming position Keynes held in gold mining stocks, despite the fact that Keynes years earlier called gold a barbarous relic. Those gold stocks soared.

At the time Keynes held them, the world was in the midst of the Great Depression and all prices were falling (including gold). You would have been an idiot to own gold mining stocks, unless you knew in advance that FDR was going to prop up the price of gold by ordering the Treasury to buy gold (after confiscating gold from all Americans).  Keynes was in the middle of those plans and scooped up the gold stocks in advance of FDR's actions.

None of this is mentioned by Chambers in his interview with Bloomberg.



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