Tags: Kiener | gold | money | invest

Swiss Asia Capital’s Kiener: Put 30% of Your Money in Gold

Monday, 30 July 2012 07:19 AM

Investors should keep up to 30 percent of their savings in gold to protect themselves against weak paper currencies that are poised to drop even further, said Juerg Kiener, Managing Director and Chief Investment Officer of Swiss Asia Capital.

Central banks around the world have debased their currencies to stimulate their respective economies, and more such policies could be on the way.

“Because the purchasing power of money is being totally destroyed during the monetization period, and if you look at the last few monetization periods, the purchasing power of the dollar lost about 30 percent,” Kiener told CNBC.

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“So if you lose 30 percent within a short period, a 30 percent of something which preserves your purchasing power is actually equalizing your losses on the rest of your portfolio.”

The Federal Reserve meets this week to address interest rates as does the European Central Bank.

Also this week, the United States will release its latest unemployment figures as will the eurozone, and markets are growing increasingly convinced that faltering economies will prompt both central banks to intervene with monetary stimulus measures.

The Fed has jolted the U.S. economy with two rounds of quantitative easing, under which the Fed buys bonds from banks, injecting them with liquidity to spur investing and hiring, and talk has continued to build that a third round is on the way in wake of sagging economic indicators.

Other tools up for consideration involve the Fed cutting the 0.25 percent interest rate the Fed pays on bank reserves, which would incentivize banks to lend more and to keep less money stashed in Fed accounts.

“They are at the end of their rope and are probably searching for every last option for what they can do,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York and a former economist for the Fed Board in Washington, according to Bloomberg.

“You can’t rule anything out because they’re going to flail around and try every last thing they can.”

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Monday, 30 July 2012 07:19 AM
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