A lot of billionaires have been buying and storing gold recently. Let’s see why…
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If you go to the portfolios of some of the wealthiest people in the world, one thing might stand out to you, a lot of them own a heap of gold. Ray Dalio, Lord Jacob Rothschild, David Einhorn, Robert Kiyosaki, to name a few, have a big chunk of their net worth in gold.
These guys have billions of dollars in their bank account, ok you got me kiyosaki’s only got millions. But, why have they chosen gold as a key part of their investments…?
Let’s first take a look at this though. So Ray Dalio I’m sure you know who is, he runs the largest investing hedgefund in the world, called Bridgewater. His net worth is $20.3 billion dollars, & he recommends 5-10% of a portfolio to be in gold. He famously said “if you don’t own gold, you know neither history nor economics”.
Lord Jacob Rothschild, prominent member of the Rothschild banking family, he’s got a net worth $6 billion. Over the years he’s bought vast amounts of gold as a caution to bankers that the world is now in unchartered waters. He said that “central bankers are continuing the greatest experiment in monetary policy in the history of the world” and he’s reacted by replacing dollars with gold.
David Einhorn the man made famous for shorting Lehman brothers before the financial crisis in 2008, he owns a lot of gold as well. He holds it as a hedge against inflation saying that “monetary policy initiated by the fed is bullish for gold”.
Robert Kiyosaki, net worth $100 million, made famous from his rich dad, poor dad book, he’s a big advocator of gold, just look at any of his content on YouTube or social media. This is a pattern that we can see consistently in a range of billionaires, the hoarding of gold and it’s important to know why…
So in order to understand this I need to take you back to 1970. In 1970 a young Wall street trader by the name of Warren Mosler, begins thinking through some unusual theories that he has on the economy. Later to be known as MMT. 20 years passes and in 1993 he thinks why not publish these theories on the internet, which he did with an essay called “soft theory economics”.
Of-course to start with no one pays attention to it, but then Australian economist Bill Mitchell finds it and agrees with him. As time goes on Mosler’s theories get more and more popular across the internet and political leaders like Alexandria Ocasio-Cortez and Bernie Sanders start supporting them. Then you see powerful institutions like the fed, implement policies seemingly influenced by Mosler.
He was the one who created the fresh economic theory called MMT. Modern Monetary Theory. Arguing that we shouldn’t worry about national debt or government deficits because the USA has the power to create money.
Don’t worry about recessions. You can create money out of thin air and solve them. Don’t worry about running huge deficits like we have been doing consistently for 20 years now, this is not a problem we can create more money and wipe out these deficits.
Now, some economists agree with this theory created by Mosler. Some politicians agree with it as well. But a lot of people are strongly opposed to it. This theory and the growth of it over the years is a key reason why the world’s super rich are taking their money out of the dollar and putting it in to gold…
You see the problem with MMT is that well yes it does help when things go bad, and it helped lift us out of a pretty nasty recession in 2020, but it does come with its costs.
And one of those is the devaluation of the dollar. The worlds super rich and a lot of other smart people who analyze these popular economic policies being implemented across the world, think, hang on, why would I want to hold a currency that’s constantly being devalued. Why not hold on to something that isn’t.
Gold, most of that’s already been mined. We’ve mined 190,000 tonnes, there’s around 50,000 left, aka we’ve already mined 80% of it. It can’t get devalued by much more like the dollar. So let’s preserve our wealth, avoid currency crashes & not have to worry about these modern economic policies that pose a lot of danger.
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