This seems to be a very common theme.
In his latest letter to investors, regarding the euro bailout, Kyle Bass revealed that he made a big gold buy on the grounds that everyone from Brussel to Tokyo was now in print-and-debase mode.
In his daily note, David Rosenberg says almost exactly the same thing:
Meanwhile, a new socialist government in Japan wants a weaker yen. Sterling
has only one way to go in an environment of heightened political uncertainty and
a balance sheet that is at least as extended as Greece. And the ECB just gave
notice with its agreement to buy sovereign and corporate debt that it is willing to
distort the pricing of risk in the bond market for the greater good of helping
profligate countries to avoid either defaulting or certainly help them finance their
obligations at a subsidized cost. The Bundesbank, this is not.
So gold is no government’s liability and the shape and shift in its supply curve is
the shape would seem to be a little easier to make out than fiat currency. We
may end up being overly conservative on our peak gold price forecast of $3,000
It seems hard to argue with the logic of the gold bulls right now, except that when everyone is making the same call, that’s not usually a time for bullishness.
What else could be bearish for gold?
Well, if the real economy comes humming back, that could prompt investors to pour money into real assets. And if the world enjoys a shock bout of stability, then at least some of the fear premium could come out.
Just some things to think about.
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