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“It is not surprising that people buy gold. But authorities may at some point try to monetize gold, making it illegal to own it as an individual. They will do so only if they feel the need to create a stable unit of account for world trade. “
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It’s Crispin Odey, a European hedge fund manager known for making the headlines with his doomsday predictions, explaining in a note to Bloomberg News on Wednesday why he thinks private ownership of gold could be banned if the government loses control of inflation.
Odey said that when the economy recovers from the coronavirus pandemic, which it compared to the Great Depression, central banks will not be able to contain inflation.
“History is full of examples where leaders in times of crisis have resorted to currency degradation,” said Odey, who raised his gold position in his European fund Odey to 39.9% since the beginning of the year. 15.9% month end of March.
The fund billed the initial market collapse with a 21% increase in March, according to the letter. It fell 9.5% in April as investors returned to a risky approach.
The fear of government confiscation, as Bloomberg News explains, is often discussed among the serious golden mistakes: arrived in the United States in 1933 – but since the main currencies are no longer linked to gold, there is nothing to indicate that central banks are realistically considering such a decision.
Odey said he expects the powers that be to fight rising inflation and lose, as rates climb 15% in 15 months will weigh heavily on bonds and growth stocks .
As for Wednesday’s trade, gold prices
GC00,
-0.04%
it was set at a higher level for a second session, as economic stimulus measures have boosted demand for precious metals in the context of economies trying to reopen the COVID-19 pandemic.
Equities also gained ground, with the Dow Jones Industrial Average
DJIA
-0.03%
Composed of Nasdaq
COMP,
+ 0.42%
and S&P 500
SPX
+ 0.23%
everything firmly higher.