Tags: Singer | gold | bitcoin | currency

Hedge Fund Manager Singer: Gold, Not Bitcoin, Is the Real Safe Haven

By John Morgan   |   Thursday, 30 Jan 2014 09:59 AM

Investors should forget bitcoin and go for gold instead as the real alternative currency, says hedge fund manager Paul Singer, principal of Elliott Management.

In an investor letter this month, Singer sang the praises of what he regards as the tried-and-true precious metal, CNBC reported.

"We think that gold is a unique investment asset, the only real money that has stood the test of time throughout recorded history," he wrote.

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These 38 Investments Have a 96% Win Rate

By contrast, Singer regards bitcoin as a flash-in-the-pan. "There is no more reason to believe that bitcoin will stand the test of time than that governments will protect the value of government-created money, although bitcoin is newer and we always look at babies with hope," Singer proclaimed.

"Bitcoin and its relatives represent an understandable impulse (anti-big-government, pro-freedom, pro-modernity), but we do not see how it actually survives."

Singer said the current global climate, in which many governments are trying to weaken their currencies in order to keep their economies afloat, is an ideal one for gold.

"If the global economy recovers strongly without a significant uptick in inflation, then gold might continue to be a neglected asset class. But low growth and high inflation are typical hallmarks of structurally unsound economies experiencing monetary debasement, so perhaps that phase is next, or soon to appear," Singer noted.

MarketWatch columnist Brett Arends reported that a currency crisis in Argentina has prompted gold prices there to jump 25 percent this month in local peso terms.

"And this, I should add, is using the 'official' exchange rate for pesos. According to Reuters, in the back streets of Buenos Aires the national currency is now changing hands into foreign currency for as little as 60 percent of the official rate."

Arends said gold prices are also zooming upward in Brazil and Turkey, two other nations that are experiencing currency turmoil.

Former Rep. Ron Paul, R-Texas, a longtime foe of the Federal Reserve's ultra-loose monetary policies, told CNBC and Yahoo's Talking Numbers he believes gold has hit the bottom of its price cycle in the United States and is a smart long-term investment.

However, The Wall Street Journal suggested gold "has a long way to go to regain investors' trust" after its steep per-ounce price declines during the past two years.

The Journal predicted gold's nascent current rally, precipitated by international currency problems and global government deficit spending, might only be a short-term rebound.

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