Friday, September 7, 2012

World's Top Hedge Fund Manager On Why You Need to Own Gold

Ray Dalio, net worth $10 billion, manages the worlds largest hedge fund, Bridgewater Associates. According to Forbes, the hedge fund has "continued to post spectacular results in 2011 even as the average hedge fund lost money".  Here's what Dalio has to say about gold in his latest investment letter:
Gold is primarily an alternative to fiat currency and a storehold of wealth. The main advantage that gold has over other currencies is that it can’t be printed. While we have just gone through a period in which the degree of monetary stimulation has ebbed, the ongoing deleveraging means that developed economic will remain highly reliably on continued stimulation for years. By the end of the quarter, central banks were starting to shift back toward renewed stimulation. In addition, one of the primary disadvantages of gold relative to fiat currencies, that it doesn’t pay interest, is mitigated by low rates in the current environment. Real interest rates are likely to remain very low and below real growth rates as a means of combating deleveraging and improving debt sustainability (as described in our “beautiful deleveraging” work). As such, deleveragings strongly favor shifts from financial assets into gold and other tangible assets.

Gold is also being supported by secularly increasing demand.


  1. These assholes are so late to the party that they almost needed to bring their own fucking lampshades.

    But at least they finally got it after 10 years.

    Now who are the moron mainstream reporters going to quote? Bill Gross, who we all knows runs the worlds largest paper bond fund (second to the Fed's bond fund) floored Bloomberg blonde bimbos yesterday,we saw it on Robert's blog when he shunned paper and said buy gold.

  2. Why doesn't gold pay interest? There is a market for it, and for holding it.

  3. Dixieflatline-- interest is only paid due to fractional reserves-- if you want interest on gold you would have to accept that the holder/payer would lend some/most of your gold out, thus exposing you to the inherent dangers of the current fractional reserve banking system-- i.e. take the risk that whatever institution holding your gold collapses and you lose a significant portion of your gold.

    1. You could lend out the gold yourself and receive interest directly.