The gold owner in a time when everything is up in the air

Wall Street Journal/Holman Jenkins/6-21-2016

“George Soros is buying gold. Donald Trump is talking about reneging on a portion of U.S. debt, which some of his rationalizers interpret to mean unleashing inflation to drive down its value. Bill Gross talks about a bond-market supernova getting ready to blow. Peter Thiel speaks of an unsustainable government debt bubble. Today’s ultra-low, even negative, interest rates and apparently low inflation are taken for granted by the secular stagnation theorists, who believe the status quo will persist for years and years. It’s a view that seems implausible in light of the industrial world’s debts. The path may be crooked, but the way ahead seems clear: Governments will increasingly pay their bills and expand their spending not with the fruits of the productive labor of taxpayers but by printing money. Inflation is inevitable.”

MK note:  I’m not certain if Holman Jenkins has it right or wrong with respect to inflation’s inevitability. In the end, it comes down to whether or not you as an investor/saver have taken the steps to protect yourself.  If you have, the whole debate on where we might end up as a result of the current economic quandary becomes an academic matter – more something to occupy the mind like a challenging puzzle, than something required as matter of financial survival.  Soros owns the ETF so he obviously believes the price is going to rise.  What we do not know is whether or not he owns gold in the form of coins and bullion stored safely away in some depository somewhere as a defensive holding. My guess is that he probably does given the litany of concerns he addressed in another Wall Street Journal article published earlier this month. (For an overview, go here.)  Betting on the price simply is not enough when you come to this kind of world view.