(Bloomberg) — Crispin Odey, one of Europe’s highest-profile hedge fund managers, he said that the government can ban private ownership of gold, if they lose control of inflation, in the wake of the corona virus of the crisis.
“It is not surprising that people are buying gold. But the authorities may attempt at some point to monetize gold, it is illegal to possess as a private person,” Odey wrote in a letter to investors seen by Bloomberg. They will only do this if they feel the need to create a stable unit of account for trade.”
Odey, a long critic of central bank policies, who is known for his apocalyptic predictions, the increase of the position of gold at its flagship Odey European, Inc. funds during the month of April. Holdings or the June gold futures, represented 39.9% of the net asset value of the fund at the end of the month, an increase of 15.9% at the end of the month of March. An issue of Barrick Gold corporation, the world’s No. 2 gold miner, it was his most long-equity position.
The fund, which has increased by 21% in March, and was down 9.5% in April, according to the letter. A spokesman for Odey declined to comment.
Read more: Family of Hedge Fund Traders Scored Big Profits at the time of the Crisis
The Fear of confiscation by the government is a common theme among gold’s most fervent supporters, who, for example, the U. s. government is forced to buy brands bullion holdings, which, in 1933, in the context of the devaluation of the dollar. The price of gold was raised from $20.67 an ounce to $35, where it remained until the U.s. ended the gold standard in 1971.
Today, with the major currencies no longer tied to gold, there is no indication that governments or the central banks that are considering any similar device.
Gold futures for June delivery rose 0.4% to $1753.20 an ounce at 7:38 p.m. on the Comex in New York, New York, nearly seven years.
Odey, who has already compared the current pandemic of the Great Depression of the 1930s, argued that central banks do not manage to contain inflation as the economy can recover from the impact of the world, these bans.
“History is full of examples where leaders have, in times of crisis, recourse to depreciate the currency,” he wrote. Odey is not alone in betting that gold will benefit only from the high inflation follows in the feline corona virus of the crisis, although the market measures, or inflation expectations show that this is far from a consensus.
Read more: Hedge-Fund Stars aligned Gold Again
The high inflation would hurt long-dated bonds and growth stocks, Odey predicts, citing forecasts for inflation rates of 5% to 15% in a period of 15 months. “I very much expect that the authorities in the fight against these dominant trends-for-every-inch-of-the-way, but I also expect to lose the battle,” he wrote
Odey is known for its eye-catching comments, and a bearish market outlook. By 2016, it predicted that the potential of the recession and the rising inflation in the wake of the “brexit” vote could lead to the U. k. stocks are slumping to 80%. The following year, he told investors to watch out for is the “Minsky moment”, in reference to the expression ” inspired by the work of economist Hyman Minsky to describe a sudden collapse of the market that follows the rule of the exhaustion of the credit.
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©2020 By The International Monetary Fund, L. P.