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Paul Singer says developed countries are “utterly insolvent”, buy gold
Billionaire Paul Singer, founder of hedge fund firm Elliott Management and one of the most disliked people in the world, hammered central bank monetary policy at a conference in Israel on Wednesday.
Making his controversial comments at the first ever Tel Aviv Sohn Conference, Singer argued that since the financial crisis blew up in 2008, advanced nations have been propped up by a cult of central bankers. Paul Singer’s comments are courtesy of tweets from Bloomberg TV’s Elliott Gotkine, who is attending the conference.
Singer is no stranger to controversy. A well-known and less-than popular “vulture investor”, Singer is known for figuratively going for the throat in many of his business dealings. His unrelenting pursuit of defaulted sovereign Argentina bonds through the U.S. court system, even though some note that he paid just pennies on the dollar for the bad debt, is one example of his “vulture” style of investing.
According to the tweets from Gotkine, Singer commented that “the balance sheets of developed economies were hopelessly and utterly insolvent once long-term entitlements were added in”.
Of note, Singer has previously argued that prices of stocks and bonds have been notably “distorted” by over-accommodative central-bank monetary policy. Singer has also gone on record as saying if central banks make the disastrous decision to “do more” (such as another round of QE) then a global recession or depression likely. Singer has echoed these themes in the past in his letters to investors.
Gotkine also tweeted that Singer said “I like gold. I believe it’s underowned.” Singer further noted “every institutional portfolio should be 5-10 percent invested in gold to protect against zero interest rates that are degrading the value of paper currency.”
Singer also argued that gold was the one tradable asset that has been “treated unfairly”, and pointed out that his fund holds gold through options.
“Gold is the only real money,” Singer claimed. “Gold would do well if people felt they needed some real asset to protect against inflation, government policy and/or diversification from stocks and bonds.”
Singer also commented:
“In a world where the value of paper money is affirmatively aimed at being degraded by central bank policy, it’s kind of surprising to me that gold can’t catch a bid.”
This article was originally published by ValueWalk.
Photo: Bullion Vault