Gold News

Paulson, Soros, Gold...and Stiglitz

There is no such thing as "correct" regulation...

TWO OF the world's best investors are Buying Gold heavily, writes Bill Bonner for the Daily Reckoning.

George Soros and John Paulson both added to their GLD positions in the second quarter, increasing their stakes in the world's biggest Gold ETF.

What do they know? Maybe nothing...maybe they're wrong.

Who knows? Nobody...

Our guess is that they will look like idiots for a while... and then look like geniuses. As we told a radio interviewer yesterday – Tokyo today... Buenos Aires tomorrow.

Speaking of Buenos Aires, and moonshine, Nobel Prize winner Joseph Stiglitz gave a speech in Argentina this week. The orator was equal to his audience. He spoke nonsense; the Cristina government was happy to hear it. The Buenos Aires Herald reports:

During his speech, Stiglitz praised the Government's export duties policies, assuring that thanks to them benefits that went for the exporters as a consequence of leaving the crisis behind, helped in the process of income distribution.

The Nobel Prize winner also warned about a slowing down of global growth. When asked by on his opinion on the alleged "stagflation" that according to some local economists Argentina is entering, Stiglitz replied: "I have no detailed information on what is going on in Argentina. Growth is slowing down on a global scale. Europe is in a recession, China and India are seeing less growth, which will lead Argentina into implementing good policies to avoid such deceleration. And if the wrong policies are implemented, the slowing down of the economy could be even more severe."

However, when asked what those "wrong policies" could be, the economist avoided a straight answer: "that would demand getting into details about policy and I don't feel in any condition to exercise an opinion on it."

When faced with questions regarding how state intervention affects a country, Stiglitz replied that "there isn't a single action that can measure the level of intervention. Governments always intervene. Markets only exist in a context of laws, regulations, rules and policies. There will always be rules in regulations and what matters is having the correct regulations available."

Has Mr Stiglitz learned nothing? There are rules. There are regulations. But there are no 'correct' regulations. That is to say, no one can ever know what is the correct regulation is. Every manipulation has unforeseen consequences that cannot be foretold. Why? They are unforeseen!

The only real choice is 'more' or 'less.' And 'less' is almost always the right answer. Interference is an expense. The less of it you have, the better off you are.

Since 2005, BullionVault has brought the advantages of the wholesale gold market to the individual investor, allowing ordinary people to Buy Gold at the lowest price possible. Visit BullionVault to find out more...

New York Times best-selling finance author Bill Bonner founded The Agora, a worldwide community for private researchers and publishers, in 1979. Financial analysts within the group exposed and predicted some of the world's biggest shifts since, starting with the fall of the Soviet Union back in the late 1980s, to the collapse of the Dot Com (2000) and then mortgage finance (2008) bubbles, and the election of President Trump (2016). Sharing his personal thoughts and opinions each day from 1999 in the globally successful Daily Reckoning and then his Diary of a Rogue Economist, Bonner now makes his views and ideas available alongside analysis from a small hand-picked team of specialists through Bonner Private Research.

See full archive of Bill Bonner articles

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

Follow Us

Facebook Youtube Twitter LinkedIn



Market Fundamentals