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John Paulson's Scary Speech: Double Digit Inflation By 2012, Gold At $4,000
The Business Insider ^ | 9-28-2010 | Courtney Comstock

Posted on 09/28/2010 12:34:11 PM PDT by blam

John Paulson's Scary Speech: Double Digit Inflation By 2012, Gold At $4,000

Courtney Comstock
Sep. 28, 2010, 2:51 PM

John Paulson scared the pants off of a packed audience at New York's University Club recently as he warned them of huge changes in the economic environment in the years to come.

Forbes' Bob Lenzer reports Paulson's saying:

“If you don’t own a home buy one."

”If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.”

Paulson has been bullish on housing for a while now (he runs a housing recovery fund), but this is him hitting super-bull territory. 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.

[snip]

Paulson sees coming:

* 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

It's worth noting that if gold goes to $4,000, Paulson will be a top contender for the richest man in the world.

[snip]

(Excerpt) Read more at businessinsider.com ...


TOPICS: News/Current Events
KEYWORDS: deflation; economy; gold; hyperinflation; inflation; silver
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To: wagglebee

What if world supplies of gold are 50 or a 100 times what people believe and a consortium has been hording it for a century or more?


False premises lead to bad decisions.


61 posted on 09/29/2010 9:50:25 AM PDT by Atlas Sneezed (Congressmen should serve two terms: One in Congress and one in prison.)
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To: sten

thus, if you were to grab a 30 yr note NOW for $500,000 @ 5%, you would be paying $2,684/mon. this might seem tough when only making $50,000/yr now, or about $4,166/mon. but if your salary were to increase with inflation, it would be around $150,000/yr, or $12,500/mon. this would make paying your fixed rate mortgage fairly simple.


Until they raise your taxes to bail out the note holder.


62 posted on 09/29/2010 9:51:52 AM PDT by Atlas Sneezed (Congressmen should serve two terms: One in Congress and one in prison.)
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To: Beelzebubba

What is the “false premise”? There are a lot of people today who have converted significant portions of their investments into gold, but how many have actually seen the gold?

For the record, I do not believe that there is a larger gold supply than people think, but I wouldn’t be surprised if some of the gold being sold today didn’t actually exist.


63 posted on 09/29/2010 10:16:24 AM PDT by wagglebee ("A political party cannot be all things to all people." -- Ronald Reagan, 3/1/75)
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To: Beelzebubba
Second (and this is subtle) you shouldn't adjust the price of a commodity for inflation, because inflation is essentially defined as the change in commodity prices.

I think it's time for people to really start thinking about what they mean when they call gold a commodity.

Look at other commodities like oil, soybeans, corn, wheat, cattle, cotton, sugar, etc., they are ACTUAL commodities that are consumed on an ongoing basis.

Then look at metals, copper has real use as a commodity, and platinum and silver have some definite industrial applications.

Then there's gold. The industrialized world hasn't used it for anything other than jewelry in a long time. And the higher the price goes, the MORE DIFFICULT it becomes to use as an exchange for everyday goods (is there a practical method to extract say 1/600th of an ounce of gold to buy a loaf of bread?).

64 posted on 09/29/2010 10:31:43 AM PDT by wagglebee ("A political party cannot be all things to all people." -- Ronald Reagan, 3/1/75)
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To: blam

Gold *may* skyrocket, but not because of inflation. Money simply has to have a place to go, and stocks and houses may not be where money wants to be.

That leaves government bonds, with states defaulting on them in the near future, and federal bonds, with the Treasury not leaving any unpurchased for the private market to buy.

Well, if you rule out stocks, bonds, and real-estate...not a lot of options remain for Big Money.

So because of the above, gold may increase even while housing, salaries, and stocks all fall in value.

Yes Virginia, gold can increase in price during deflation. In fact, this happened in 1933.


65 posted on 09/29/2010 10:36:38 AM PDT by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: wagglebee

What is the “false premise”?


Your “what if?” scenario where there is immense amounts of gold hiding out there.


66 posted on 09/29/2010 10:51:27 AM PDT by Atlas Sneezed (Congressmen should serve two terms: One in Congress and one in prison.)
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To: wagglebee

Maybe you want to check your dictionary before you redefine “commodity” to suit your arguments.


67 posted on 09/29/2010 10:53:03 AM PDT by Atlas Sneezed (Congressmen should serve two terms: One in Congress and one in prison.)
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To: Beelzebubba
Your “what if?” scenario where there is immense amounts of gold hiding out there.

I stated that I DID NOT believe this was the case.

Nevertheless, can you or anyone else say for a certainty that it IS NOT the case?

Can you say for a certainty that there isn't any fraud in the gold trading market?

68 posted on 09/29/2010 10:56:37 AM PDT by wagglebee ("A political party cannot be all things to all people." -- Ronald Reagan, 3/1/75)
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To: Beelzebubba
Maybe you want to check your dictionary before you redefine “commodity” to suit your arguments.

Where did I try to redefine anything?

Here's what I wrote:

I think it's time for people to really start thinking about what they mean when they call gold a commodity.

I then wrote about other commodities and concluded with this:

Then there's gold. The industrialized world hasn't used it for anything other than jewelry in a long time. And the higher the price goes, the MORE DIFFICULT it becomes to use as an exchange for everyday goods (is there a practical method to extract say 1/600th of an ounce of gold to buy a loaf of bread?).

Do you actually have any comments on this or are you simply going to make bizarre accusations based on your misinterpretation of what I actually wrote?

69 posted on 09/29/2010 11:01:16 AM PDT by wagglebee ("A political party cannot be all things to all people." -- Ronald Reagan, 3/1/75)
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To: wagglebee

I’m done with you.


70 posted on 09/29/2010 11:36:11 AM PDT by Atlas Sneezed (Congressmen should serve two terms: One in Congress and one in prison.)
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To: Beelzebubba

Is that your way of saying that you don’t actually have any response to my comments?


71 posted on 09/29/2010 12:50:01 PM PDT by wagglebee ("A political party cannot be all things to all people." -- Ronald Reagan, 3/1/75)
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To: wagglebee

Get the attention you crave elsewhere.


72 posted on 09/29/2010 2:48:12 PM PDT by Atlas Sneezed (Congressmen should serve two terms: One in Congress and one in prison.)
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To: silverleaf

Whiskey


73 posted on 09/29/2010 7:02:05 PM PDT by AdamBomb
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To: utherdoul

You’d have been better off if he’d bought you some Exxon and Phillip Morris and put them on dividend reinvestment plans.


74 posted on 10/13/2010 7:11:17 AM PDT by MSF BU (++)
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