Soros out of Gold - do you believe this?
The previous time George Soros said in public he is going out of Gold, the metal soon after that jumped up. Some analysts said Soros has made a big mistake. But it is not sure he had done it. Nobody knows what were the real investments of Soros. We all know only the official investments, that have a propaganda value, and are used for this purpose. I.e. it is absolutely possible Mr Soros to be "long" on gold, while his publicly known funds are "short". In fact making business is a private issue and you can not make it if everyone knows your plans. So let's not think Soros is a fool and says everything. In one of my fiction stories ("Jews") there is an investor called Mr Goldberg who is buying physical gold at the same time he is demonstratively selling "paper" gold...
So Mr Soros has proven himself as a clever investor, and he clearly sees the money print bubble on the market. So he is not a fool to stay at funny positions like shares and government bonds, that can disappear literally overnight when the Central banks lose the control over money supply. So it would not be a surprise if de facto Soros (and also much other much speaking gurus) is "long" on gold.
Today a hardly concealed conflict meeting of G-20 is going in Moscow. And the main problem is the money print and the frontal Japan attack on the Yen exchange rate. But being in the same economic troubles like Tokyo other major powers do not agree on devaluation of the Yen that will harm their own export. So a cannonade of money prints is expected in so called "currency war", that started when everyone decided to improve its economy at the expense of the rest.
Also today a very interesting verbal intervention happened from the Bundesbank governor Jens Weidmann, who said ECB will not lower the interest rates and must not intervene on markets to devalue the Euro. Mr Weidmann is known as a suppressed opposition in ECB, and this verbal attack is an attempt to avert a possible new money print round from the bank. Two top German members of ECB have already resigned in a discontent of money-print adventures started by Mario Draghi. The Chairman who some days ago, although keeping the rates (that are much less even than the inflation), has made his own verbal intervention that lowered the Euro. So obviously in the European Central Bank again there is a confrontation, that almost sure will end at the same way - Weidmann will remain alone and pro-easing majority will start a new flood of the market with easy money.
So there is no fundamental factors to devalue the gold. Every deep move down must be used for buying. With so much paper money everywhere, there is no chance of keeping the price low. Nobody is capable of doing this.
And we must not forget the government debt. It is so huge that the only way for repayment is to devalue it via inflation. Otherwise the leading governments of the world will default.
So don't be naive. Stay close with gold and hear at the market jokes for pleasure...
Feb 15th 2013