Each day, more economists and savvy billionaires are beginning to vocalize their thoughts on the current state of the economy and particularly on the word that’s been at the top of everyone’s mind; inflation.
Last week it was the revered billionaire investor Warren Buffett who warned of very substantial inflation, and this week another billionaire investor Sam Zell shared his thoughts on where he thinks the economy is headed and what he is doing about it.
Upon the many things we find interesting about Zell, his stance on gold (up until now) has possibly been the one factor that always stood out to us.
At age 79, Zell has never been an advocate for gold. In fact, he actually admits to condemning others for purchasing it.
However, recently his whole attitude towards the precious metal has changed thanks to inflation and his concerns on the US Dollar.
Zell had this to say about inflation and gold, “Obviously one of the natural reactions is to buy gold.” “It feels very funny because I’ve spent my career talking about why would you want to own gold? It has no income, it costs to store. And yet, when you see the debasement of the currency, you say, what am I going to hold on to?”
An astute investor who has achieved a status of financial wealth has gone from extremely bearish to extremely bullish on gold due to inflation alone.
“Oh boy, we’re seeing it all over the place,” he commented. “You read about lumber prices, but we’re seeing it in all of our businesses. The obvious bottlenecks in the supply chain arena are pushing up prices. It’s very reminiscent of the ’70s.”
So what about other assets like oil, gas, and cryptocurrencies?
“Right now, oil and gas is not priced to reflect the risk of what’s going on, whether it be in the EV world, a climate-changed world,” Sam said. “As recently as a couple of years ago I thought the risk-reward ratio was appropriate. It’s clearly become very inappropriate as our political situation has changed.”
If protecting your assets is your number one priority like it is for us, then the direction to go is probably not towards the cryptocurrency that started off as a joke. Yes, that’s true.