|
03-25-2009 Hedge Fund Manager John Paulson Buys $1.3 billion in Gold Stock |
|
Written by Richard Fairchild
|
On March 17, 2009, John Paulson or Paulson & Company paid $1.28 billion for an 11% stake in AngloGold Ashanti Ltd.. The firm is one of the largest gold miners in the world. Paulson is estimated to have made at least $10.5 billion in 2007 and 2008 shorting financial services stock as well as mortgage debt.
Paulson made his investment a day after Fed Chairman Ben Bernanke announced the U.S. Federal Reserve would buy up to $1.2 trillion of U.S. Treasury Debt. Gold stocks rallied, gold went up 7% and the dollar tanked after Bernanke’s announcement. Paulson is most likely better on the Fed trashing the dollar. We may see more inflation and a flight from paper currencies to gold. You will also see energy prices start going up again. The only restraint will be the weak economy.
If the economy somehow starts to get stronger, something we doubt. Gas prices could hit $5 a gallon or more. The green push and taking offshore and onshore areas off the table by locking them up as federal land means supply will be even less. The USA easily has four times the Saudis oil reserves in clean coal, coal diesel, shale oil and onshore oil in the lower 48 states. Someone or some country never wants it developed. These natural resources could reboot our economy and repay trillions in debt which appears to be spent weekly on another stimulus or scheme.
We mentioned on 1-30-2009 (see below) that gold, precious metals and oil may be where it is at over the next 12 months. We are not saying jump in gold now but you may want some exposure on a pull back. Investors Alliance members will see more in the monthly journal under the Asset Allocation models.
.jpg)
|