Story Published:
Mar 3, 2010 at 5:25 PM CST
Story Updated:
Mar 4, 2010 at 7:26 PM CST
Yet the latest US filings show that Soros Fund Management LLC more than doubled its stake in the SPDR Gold Trust – a near-proxy for gold ownership – between Oct. and Dec. last year, taking its stake to nearly 2% of the ETF's total stock in issue.
"HE WHO HAS a Hungarian friend has no need of an enemy," runs the old saying – a nice racial slur that gold investors might feel true of George Soros right now.
What's Really Going On?
Soros may have less day-to-day control over the fund than its name suggests, of course. And that holding of 6.2 million shares in the world's largest Gold ETF, worth some $663 million by Dec. 31st, may have been sold before Soros spoke to CNBC four weeks later.
But if you actually hear what George Soros said – rather than taking headline writers for gospel – gold's Hungarian friend is less of an enemy than he appears.
"When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold."
Immediately newspapers and finance sites worldwide screamed how "Soros Says Gold is Now Ultimate Bubble" last month.
"But it's just possible he was making rather more accurate use of the English language than [British journalists]..."
"Ultimate" means final. So does the Hungarian translation, végső. It does not mean "mother-of-all"...
It's also worth noting, perhaps, that after escaping Nazi deportation in 1944, and fighting the occupation a year later, Soros is reputed to have begun his financial career trading currencies and jewelry amid the hyperinflation which then swept Hungary as its war-time economy and fascist puppet-government collapsed.
By July 1946, the "ultimate" stage of that currency event – the worst-ever recorded inflation in history – shop prices were doubling every 15 hours. One gold Pengo coin, minted in 1931, was worth 130 trillion paper Pengos...
Is it Time to buy Gold?
In terms of timing, all precious metals track gold — not only silver, but also platinum and palladium. The differences are strictly an issue of how far each metal rises or falls.
Between now and 2012, there will be periods when silver and other metals do better than gold. But when all is said and done, you will find that gold is, by far, the single best performer because of its value as a hedge against the dollar. Many”experts” expect gold to exceed $2,000 per ounce before the end of 2011.
Bob Tonachio, CEO of Robert James & Associates, Inc. may be contacted. At 1-800-530-5700 His firm charges no fees for advice and consultations are always confidential and free of charge.
www.robertjames.us is an educational web site with live gold and silver trading 24 hours per day.
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