Gold gets some powerful friends

http://www.marketwatch.com/story/gold-gets-some-powerful-friends-2012-09-10

LeMetropoleCafe’s Friday wrap-up included quotations from a remarkable Bloomberg interview with the famous bond fund manager Bill Gross of Pimco which expressed a preference for holding gold: “Gold cannot be reproduced. It can be taken out of the ground at an increasing rate, but there is a limited amount of gold. There has been an unlimited amount of paper money over the past 20 years to 30 years…

“Central banks got out of the gold trade a few years ago. Just recently, they are coming back into that market…I think for the most part it is not a crowded trade yet even though the price has accelerated in recent quarters and recent years.”

These views, while quite normal for a guerilla gold bug, would have been career-ending heresy for an orthodox Wall Street not so long ago.

Another LeMetropoleCafe appearance was by fabulously successful macro-hedge fund manager Ray Dalio of Bridgewater Associates (via his latest client letter): “Gold is primarily an alternative to fiat currency and a storehold of wealth.

“The main advantage that gold has over other currencies is that it can’t be printed…deleveragings strongly favor shifts from financial assets into gold and other tangible assets.”