The founder of the world’s biggest hedge fund says every investor should own some gold.
Business Insider CEO Henry Blodget recently interviewed Ray Dalio, the founder of Bridgewater Associates.
You recommend that most portfolios should contain some gold.”
Dalio’s didn’t even hesitate.
Yeah. Of course.”
The SchiffGold Friday Gold Wrap podcast combines a succinct summary of the week’s precious metals news coupled with thoughtful analysis. You can subscribe to the podcast on iTunes.
Apple recently announced its new iPhone 10 to much hoopla. It will feature a retina display, increased storage and RAM, and enhanced facial recognition (which is either real cool or incredibly creepy, depending on your point of view.)
Of course, this will all come with a pretty hefty price tag of around $1,000. A lot of people were taken aback by the cost of the new Apple gadget. On the other hand, there are apparently at least a few people out there who think that isn’t nearly enough. I mean, who wants a plain old, boring $1,000 iPhone 10 when, for a mere $69,995, you can walk around with the solid gold Lux iPhone X Ingot pressed against your ear?
The Federal Reserve took a hawkish stance at its latest Open Market Committee meeting, announcing plans to begin unwinding its balance sheet next month. Fed chair Janet Yellen also indicated she plans to raise interest rates one more time this year.
Here’s the question: Is this a viable path forward, or is the central bank playing a game of monetary chicken?
Earlier this month, the US threatened to lock China out of the dollar system if it doesn’t follow UN sanctions on North Korea. Treasury Secretary Steven Mnuchin threatened this economic nuclear option during a conference broadcast on CNBC.
If China doesn’t follow these sanctions, we will put additional sanctions on them and prevent them from accessing the US and international dollar system, and that’s quite meaningful.”
The threat may be meaningful, but it also might be empty.
Toys R Us filed for bankruptcy earlier this week, a wicked head-shot to a retail sector that’s been reeling for months.
The TRU filing ranks as the second-largest US retail bankruptcy ever, according to S&P Global Market Intelligence.
Toys R Us had $6.6 billion in assets at the time of filing. Only Kmart was bigger. It had $16.3 billion in assets when it went bankrupt in 2002. Crushing debt pulled the giant toy seller under. According to a Bloomberg report, the company has piled up more than $5 billion in debt. Toys R Us reportedly pays more than $400 million a year on debt service alone.
The company says it plans to continue operating and secured a$3.1 billion operating loan to stabilize operations.
Even some of the biggest supporters of Bitcoin and other cryptocurrencies recognize the stability of gold.
Last week was a bad week for Bitcoin. It’s price dropped significantly in the wake of a Chinese government crackdown on cryptocurrency exchanges in the country. Bitcoin’s price has recovered a bit this week, but a recent article published by The Cointelegraph still proclaimed now is a good time for gold.
Cryptocurrencies, especially Bitcoin, have flown a little too close to the sun recently, and it has seen them get burned by a few key monetary institutions, as well as governments. This attack on Bitcoin, as well as fear and speculation around other markets, could spell a good time for investment in gold. Seen as an insurance policy, gold has been a steady and safe investment for hundreds of years. As markets, beyond even the crypto market, get spooked, investors could see a safety net in the precious metal.”
Russia and China seem to be betting their monetary futures on gold. Their long-term maneuverings could seriously undermine the dominance of the US dollar and shift the world’s economic center of power from West to East.
Russia and China buy more gold than any other countries in the world, with Russia leading the way. Over the last decade, the the Central Bank of the Russian Federation has added more than 1,250 tons of gold to its reserves, according to the World Gold Council. At 1,700 tons, Russia’s has the sixth largest gold reserves in the world. Russian gold makes up about 17% of the nation’s wealth.
In 2016 alone, the Russian central bank purchased 201 tons of gold, far more than any other central bank in the world. The People’s Bank of China ranked second, adding 80 tons to its reserves.
The London Bullion Market Association recently chose a new administrator for its silver price auction, and scientists have discovered a variety of rice that accumulates and stores naturally occurring silver in the soil.
The Silver Institute covers these stories, and highlights several other technological innovations involving silver, in its latest issue of Silver News.
The Federal Reserve Open Market Committee will meet this week. There is virtually no expectation of a rate hike this time around, but there is widespread anticipation that the Fed will outline its strategy for shrinking its massive balance sheet.
In his most recent podcast, Peter Schiff made a pretty good case that the Fed won’t be able to shrink the balance sheet at all. I fact, he says the central bank will end up having to expand the balance sheet even more when it’s all said and done. The deteriorating economy is one factor, but an even bigger problem for the Fed is the exploding national debt.
