Who Else Has Been Buying Gold?
Source: Seeking Alpha, Andy Abraham (9/14/09)
". . .are you the last one now to be buying gold?"
What I find interesting is the fact that the hedge fund managers who successfully called the housing crisis are now buying gold. It is not that they are just buyingâ€”they are buying in a big way. John Paulson who made a fortune in the subprime crisis is now betting heavily on gold. He has invested almost 50% of his fund in gold. He is not alone.
David Einhorn has been buying gold heavily, as well. Besides hedge fund managers and China, virtually every trend-following commodity trading advisor has been buying gold since its recent breakout. The difference with the commodity trading advisors is they are not looking at any fundamental reasons; they are buying simply because the price has been going up. The fundamentalists claim that regardless of inflation or deflation they believe gold will continue its upward thrust.
Inflation is clear with all the money being printed. The deflation stance is interesting as the fundamentalists feel that the U.S. dollar will devalue and, with this, gold will go up in value. Their thoughts are aligned to almost a debt-deflation stance causing inflation. This is comparable to what happened to the Asian tigers in 1998.
Regardless if one is fundamental or a trend-following commodity trader, gold has been moving upward in price. It might be worth considering having some gold coins in your pocket.