Billionaire investor Kenneth Griffin leads one of the most successful hedge funds in the world. The CEO of Citadel Advisors is recognised for his open-mindedness to diverse asset classes and quantitative investing approach. Griffin has a personal net worth of $50.5 billion (£37.9 billion), according to Forbes.
In an interview with Bloomberg this week, Griffin highlighted that investors are increasingly viewing gold as a safer asset than the dollar, describing the trend ‘really concerning.’
‘We are seeing substantial asset inflation away from the dollar as people look to de-dollarize or de-risk their portfolios against US sovereign risk,’ he said, as gold reached an all-time high of over $4,000 (£3,006) per ounce this week on due to the ongoing government shutdown, an emerging dollar debasement trend, forecasts of lower interest rates, and central banks in Asia and the Middle East piling into the precious metal.
‘The US is experiencing fiscal and monetary stimulus more typical of a recession, which is stoking markets,’ Griffin noted. ‘We’re definitely on a bit of a sugar high in the US economy right now.’
Griffin also downplayed the impact of the $100,000 (£75,153) cost to keep employees on H-1B visas for his company. ‘Fortunately, in our sector, a $100,000 one-time cost to hire someone isn’t make-or-break,’ he said. ‘I worry far more about brilliant students in India who don’t come to America, or gifted math and physics students who stay in China.’
Griffin is primarily worried about the resurgence of inflation that markets are not prepared for. ‘There’s a sense of almost inevitability that the inflation genie is going to go back in the bottle. But I think that’s a very premature conclusion,’ he said.
He added that the current immigration policy, fiscal policy, and monetary policy appear to be fostering a ‘very pro-inflationary environment.’
Bridgewater Associates founder and billionaire investor Ray Dalio echoed Griffin’s views, stating that gold is ‘certainly’ more of a safe haven than the US dollar and the precious metal’s latest rally is similar to the price surge in the 1970s, when the economy was struck with high inflation and instability.
‘Gold is a very excellent diversifier of the portfolio,’ Dalio said in a Tuesday interview with Bloomberg. ‘So if you were to look at just from the strategic asset allocation mix perspective, you would probably have as the optimal mix something like 15% of your portfolio in gold.’
Dalio views gold as a strong store of value at a time of growing government debt burdens, geopolitical tensions, and the erosion of confidence in the stability of national currencies.
The commentary from the hedge fund CEO signals a growing search for safer assets amid fears of sticky inflation, fiscal stimulus, and potential dollar weakness, reflecting a lack of confidence in traditional fiat currencies. The macroeconomic landscape is prompting investors to diversify into precious metals as hedges against market volatility.
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Originally published on IBTimes UK
