|S&P 500 Emini Futures / ES / Daily Chart / Day Session|
Last week John Paulson made a dramatic and what we feel to be prophetic speech before a packed audience at New York's University Club. In case you don't know who Paulson is, he's #45 on the Forbes list of the world's wealthiest billionaires and is worth approximately $12 billion as of 2010. On April 16, 2010, the New York Times reported Paulson had earned $1 billion in 2007, $2 billion in 2008, and $2.3 billion in 2009 from fees received from his hedge fund by betting against subprime mortgages long before the term became well known.
- Don't buy real estate
- Don't borrow money on an adjustable rate mortgage
- Do buy Gold
- Buy Real Estate (as much as you can)
- "If you don't own a home buy one."
- "If you own a home, buy another one, and if you own 2, make it 3."
- "While you're at it, lend your relatives money so they can buy a home."
- "Buy Gold"
Back to the speech: His reasoning is that home prices are great, the bond market is dead, and commodities like gold, which he also has a big prediction for, are on the rise.
According to InfoWars, he told the audience that he thinks the price of gold will hit $2400-$4000. And a whopping 80% of his assets are in gold.
Given his expectation for further money printing by the Fed – and that in 1980 the gold price rose by 100% more than the correlation implied – Paulson noted that the price of gold could hit $2,400 based only on monetary expansion, and as high as $4,000 per ounce based on a projected overshoot.
Lastly, he noted that 80% of his assets are denominated in gold.
- Low double-digit inflation by 2012, killing the bond market, and restoring strength to equities and gold.
- 2% GDP growth for 2011 and 2012
- Gold hitting $2,400 to $4,000
|S&P 500 Emini Futures / ES|
|Dow Emini Futures / YM|
|Euro FX / 6E|
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