Saturday, October 20, 2012

Great Asset Reallocation
Greg Hunter
For years, the smart money has been cashing out of traditional investments and investing in physical gold and silver. With the Fed’s latest announcement of “open-ended” QE (unlimited money printing), it looks like those who did made the right choice. Hunter calls it the “Great Asset Repositioning.”
This trend includes everyone from the small investor to central banks. Bill Gross of PIMCO calls Fed money printing “budgetary crystal meth.” If the money printing continues, says Gross, “Bonds would be burned to a crisp and stocks would certainly be singed; only gold and real assets would thrive…”
Ray Dalio, founder of Bridgewater Associates and one of Time Magazine’s 100 most influential people, owns gold, and says “people should have 10% in their portfolios.”
Ten percent? Think again. Tom Cloud of has individual high-net-worth clients with more than $20 million to protect. Most of his clients are going to a 45% allocation of physical precious metals. This is the polar opposite of debt and leverage; this is pure insurance and protection of wealth.
John Paulson, who made billions betting on the housing bust in 2007, has more than 44% in gold assets or gold shares in his fund, and recently sold all of his JP Morgan Chase stock.
Central banks are also big buyers of gold as they keep expanding reserves to diversify from the dollar and guard against a potential gain in inflation. China leads the pack here.
There has never been this kind of unlimited money creation along with 0% interest rates. Inflation is a virtual certainty. The Great Asset Repositioning is already happening amongst the wealthy. Do they see financial calamity, a new world currency, deflation, hyperinflation, global insolvency or all of the above on the horizon? Whatever, they are taking cover under gold and silver.
source: usawatchdog

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