Tags: citigroup | willem buiter | gold | investment

Citi's Buiter: Gold 'Looks Pretty Good' as Investment Amid Uncertainty

Citi's Buiter: Gold 'Looks Pretty Good' as Investment Amid Uncertainty
(Dollar Photo Club)

By    |   Thursday, 21 July 2016 07:36 AM

Citigroup’s chief economist Willem Buiter, known as a gold skeptic, now admits the precious metal is an appealing investment in times of uncertainty.

He recently told the Epoch Times he would even own gold as part of a diversified portfolio of currencies.

“I will never argue with a six thousand-year-old bubble. So gold, in times of uncertainty and especially in days of uncertainty laced with negative rates, looks pretty good,” he said.

“The fundamental value of an intrinsically valueless good is zero. For every fiat currency if it’s value is positive,  it’s a bubble. There are good bubbles when they are stable. There are bad bubbles when they are exploding upwards and downwards,” he said.

“There is nothing wrong with a bubble. Fiat money as a positive value is a very beneficial bubble. It’s much more efficient of course to produce paper money without cost if it can be managed well, rather than the costly way to extract and store gold. But bubbles are the essence of fiat money economies,” he said.

He said gold “competes with other fiat currencies, the dollar, the yen, the euro. And if these currencies now yield negative interest rates or are at risk of negative yields in the U.K. and the United States, then the currency that at least has a zero interest rate, looks better.”

Meanwhile, Jeffrey Gundlach, chief executive of DoubleLine Capital, warned scared investors that they should consider capital preservation by putting their money in cash, gold or Treasurys while avoiding U.S. stocks.

He also urged panicky Americans to calm down and take it easy when it comes to investing.

"You don't have to be out there making speculative bets on Tesla all time, it's OK to make money slowly," Gundlach recently told CNBC. "The markets take the stairs up and the elevator down. It's important not to be in the elevator," he said.

(Newsmax wire services contributed to this report).

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Citigroup's chief economist Willem Buiter, known as a gold skeptic, now admits the precious metal is an appealing investment in times of uncertainty and especially in days of uncertainty laced with negative rates.
citigroup, willem buiter, gold, investment
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2016-36-21
Thursday, 21 July 2016 07:36 AM
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