George Soros, the legendary hedge fund investor, and billionaire is no dummy when it comes to economic trends. Soros holds a degree from the London School of Economics, and he is one of the wealthiest people in the world thanks to his knowledge of economics and investing. It’s no secret that the U.S. stock market is flat-lining in 2016. The market got off to the worst start in recent history in 2016 and investors are still selling stocks and investing in other assets to protect their money. George Soros, the man that predicted that the pound sterling would have to be depreciated against the dollar and the German mark in 1992, is placing a similar bet against the Chinese yuan this year, but he is also betting on gold instead of the stock market.
According to an article published by Bloomberg.com, Soros recently sold more than 37 percent of his stocks and invested $241 million in Barrick Gold. Barrick is the largest gold miner in the world and gold mining is on fire this year. Gold mining stocks are the rage right now. Fool.com reports that 17 of the 29 gold mines that have a market valuation of more than $200 million have doubled in value in 2016. The reason for the increase is simple. Economic uncertainty is the main reason, but shrinking operating costs and the fact that central banks are buying more gold are helping gold as well.
Read more: Billionaire Soros Cuts U.S. Stocks by 37%, Buys Gold Miner
The other issue is the economic disaster that is in the works in China. Soros has been warning the world that China is going to throw the rest of the world into a 2008 type recession for the last four years, and it is finally happening. Bloomberg.com quoted Soros when he said China was in for a hard landing, and there isn’t anything anyone can do about it. The Chinese banks are overloaded with bad debts, and the government is burning through capital reserves at an unprecedented rate to keep them solvent. George Soros believes that China will have to devalue their currency by at least 30 percent over the next three years, and he is betting millions on that prediction.
The gold investment by the Soros hedge fund, which only has one investor, George Soros, signals that Soros expects the recession to hit the United States by the end of 2016. In the first quarter of 2016, the U.S. GDP only grew by 0.5 percent, and that is very weak by anyone’s standards. And it’s not just the energy sector that is impacting the GDP. The consumer market which accounts for more than 70 percent of the economy is not performing as expected.
Looking into the George Soros crystal investment ball is always fascinating, and it’s always a good idea to follow what that Soros crystal ball is saying. Source: http://www.valuewalk.com/2016/05/george-soros-gold/