Some personal thoughts on surviving the monetary meltdown
Let us start by looking at the economy
from 10,000 feet above: After 40 years of boozing on easy money and
feasting on fantastical asset price inflations, the global monetary
system is approaching catharsis, its arteries clogged and instant
cardiac arrest a persistent threat. Most financial assets are expensive,
and many appear to be little more than securitized promises with low
probability of ever delivering payment in full. Around the globe, from
Japan to the US, a policy of never-ending monetary stimulus consisting
of zero interest rates and recurring rounds of ‘quantitative easing’ has
been established aimed at numbing the market’s growing urge to
liquidate. Via the printing press, the central banks, the lenders-of
last resort, prop up banks and financial assets and simultaneously
fatten the state, the borrower of last resort, which, despite excited
editorials against the savage policy of ‘austerity,’ keeps going further
into debt almost everywhere.
‘Muddling
through’ is the name of the game today but in the end authorities will
have two choices: stop printing money and allow the market to cleanse
the system of its dislocations. This would involve defaults (including
those of sovereigns) and some pretty nasty asset price corrections. Or,
keep printing money and risk complete currency collapse. I think they
should go for option one but I fear they will go for option two.
In this environment, how can people protect themselves and their property?
Disclaimer
Before
I start sharing some of my own personal thoughts on this topic with you
I should repeat my usual disclaimer: I provide economic analysis and
opinion, food for thought. But I do not intend to give investment advice
and certainly not any specific trade ideas. I provide a worldview, and
an unconventional one at that. You alone remain responsible for your
actions, and whatever you do, you do it at your own risk.
My three favourite assets
My
three favourite assets are, in no particular order, gold, gold and
gold. After that, there may be silver, and after a long gap of nothing
there could be – if one really stretches the imagination – certain
equities or commercial real estate.
Why gold?
We
are, in my assessment, in the endgame of this, mankind’s latest and so
far most ambitious, experiment with unconstrained fiat money. The
present crisis is a paper money crisis. The gigantic imbalances that
threaten to unravel the system momentarily are the direct consequences
of years and decades of artificially cheap credit and easy money, and
are simply unfathomable in a hard money system. Take away fiat money and
central banks and our current problems would be inexplicable. (If you
are still under the widespread but erroneous impression that the gold
standard caused the Great Depression you may want to consider that the
strictures of hard money were systematically disabled and the
disciplinary power of a true gold standard increasingly weakened with
the establishment of the Federal Reserve in 1913, and the introduction
and spreading of lender-of-last resort central banking in the US
financial system. In any case, we are now in the Greater Depression, and
this one is entirely the responsibility of central banking and
unlimited fiat money.)
Whenever paper
money dies, eternal money – gold and silver – stage a comeback. We have
already seen a major re-monetisation of gold over the past decade, as
the metal again becomes the store of value of choice for many investors.
This will continue in my view, and even accelerate.
Gold is money
A
frequent allegation against gold is that its non-monetary applications
are minor and do not justify the present price, and that gold doesn’t
pay interest or dividends, quite the opposite, storing and insuring it
incurs running expenses. Gold is an instrument with a negative cash
yield.
None of these objections stand up to scrutiny. They are either wrong or irrelevant.
It
is investment goods that are supposed to offer cash yields – interest
income or dividends. But gold is not an investment good, it is a form of
money. Gold is the oldest form of money still considered a monetary
asset today, and the only truly global form of money (besides silver but
silver is today still more of an industrial commodity than a financial
one). Gold is – importantly – inelastic money. It cannot be created nor
be destroyed by politicians and central bankers. It can, of course, be
taxed and confiscated, and I come to that later.
The
main alternative to gold is therefore not bonds, equities and
commercial real estate but cash, i.e. state paper money. The person who
‘invests’ in gold is holding money. The cash in your wallet or under
your mattress does not give you a cash return either. Neither does gold.
Sometimes
I get asked, what if people suddenly stopped considering gold to be a
monetary asset and a store of value? Would its price not drop steeply? –
That is a fair point. But this applies to your paper money, too. In
fact, it applies to paper money more so.
Every
monetary asset – whether gold, paper tickets from the state, or
electronic book-entries at your bank – receives its value (exchange
value or purchasing power) from the trading public, and from nobody and
nothing else, not from the state, nor from any non-monetary uses of the
monetary asset, if it has any at all. If the public stops treating the
item in question as money, or uses it less as money or only at a
discount, it looses its monetary value. That is also always the case
with state paper money. It is a sign of our hopelessly statist zeitgeist
that many people believe that the state ‘assigns’ value to its paper
money and somehow supports this value. This is not the case. The truth
is that the paper tickets in your wallet have purchasing power (and thus
have value beyond their paper content) for one reason and one reason
only: the public accepts them as a medium of exchange, the public
accepts them in exchange for goods and services. The public also
determines what the exact purchasing power of those banknotes is at any
moment in time and at any given place. The state does not even back its
paper money with anything. If you take your paper tickets to the central
bank, what do you get in return? – Change.
Paper
monies come and go. In fact, throughout history every experiment with
paper money has ended in failure, with over-issuance the predominant
cause of death. Pound and dollar are the two oldest currencies around
today but through most of their history they were linked to gold or
silver, which restricted their issuance. Our system of hundreds of
entirely unrestricted local fiat money monopolies dates back only to
1971, at least in its present form. In the 20th century alone, almost 30 hyperinflations of paper monies were recorded.
By
contrast, gold has been money for 2,500 years at least. Should you be
more concerned about the public not taking your gold any longer, or your
paper money?
Gold is hard,
apolitical, and global money, supported by an unparalleled history and
tradition. That is the asset I want to own when our assorted finance
PhDs in the central banks, the bureaucrats in the Treasuries and
Ministries of Finance, and our sociopathic welfare politicians have
manoeuvred the system to the edge of the abyss. Which is now.
Remember,
paper money is always a political tool, gold is market money and
apolitical. Paper monies come and go, gold is ‘eternal’ (as far as we
can tell presently).
You have to be clear in your mind why you buy gold.
At
every moment in time, all your possessions – all your wealth – can be
split into three categories: consumption goods, investment goods, and
money. For most of your possessions the category is pretty clear: The
clothes you wear and the car you drive are consumption goods; your
investment funds or your equity portfolios are investments; the
banknotes in your drawer are money. For some things it is not so clear:
An expensive painting might be an investment but if you hang it in your
living room and enjoy looking at it, it is also a long-lasting
consumption good. The house you live in could be both but in most cases
it is more of a long-lasting consumption good than an investment: you
use it up over time, albeit slowly, and you cannot easily liquidate it.
You have to live somewhere.
The
wealth you are not consuming in the here and now but want to maintain
for the future can thus be held in the form of money or investment
goods. Money gives you (usually) no return but has other advantages,
namely that it allows you to maintain your purchasing power, at least if
it is proper, hard money, and simultaneously retain complete
flexibility. You are not committing yourself today to any investment
good (or consumption good); you remain on the sidelines to wait how
things turn out. But as you hold a monetary asset – a store of value and
medium of exchange of (almost) universal acceptance – you can re-enter
the markets quickly and easily. Somebody will always buy the gold from
you in the future (which is far from certain in the case of most of your
consumption and investment goods, and also in the case of that other
form of money, state paper money).
Why gold now?
It
seems that this is an opportune time to be on the sidelines, to be not
engaged in the markets for equities, bonds and real estate, or to at
least keep one’s exposure to these markets very low, since years and
decades of unprecedented money growth have inflated and gravely
corrupted the prices of standard investment goods. Sadly, these prices
now rely increasingly on the kindness and efforts of manipulating
bureaucrats to simply sit still and avoid a painful descent.
Central
bankers state – openly and unashamedly – that they now consider it part
of their mandate, if not the chief part of it, to keep asset prices at
elevated levels and, if possible, even boost them further. Naturally,
this will require ever more aggressive money printing and eternally
super-low interest rates, and certainly argues against holding much
paper money. Those who like to bet on the bureaucrats may claim that it
makes sense to hold the very financial assets the prices of which
central bankers are manipulating. As long as the central bankers are not
ashamed of running the printing presses ever faster, they will simply
get their way. Well, even under the rosiest of assumptions, this
argument does not support investment in bonds. It could, in principle,
be an argument for equities and real estate as ‘real assets’ of a sort
but even in respect to these assets I consider it unsound, as I will
explain later. Be that as it may, the beauty of gold is precisely that
it allows you to remain on the sidelines and keep your powder dry. By
holding gold you remove your wealth to a considerable degree from the
rigged game of artificially inflated and openly manipulated financial
markets. You commit internal capital flight from the fiat money system,
and you simultaneously bet on the further debasement of paper money. The
bet is this: The central bankers are trapped. The state, the banks, the
pension funds, the insurance companies, the investment funds – they all
would be in a right mess – or an even deeper mess than they already are
– without cheap money from the central bank. Ergo, the policy of
super-cheap money will have to continue until the bitter end.
There are a few more things to say about gold but before I do this let us talk about the worst asset.
Bonds – the worst asset class in my view
Bonds
are ideal assets for you if you suffer from a financial death wish. Let
me put it like this: After 40 years of almost relentless and of late
accelerating money production we have too much debt. When you buy bonds
you buy debt, and there is a lot of it to go around. And it is not even
cheap. In most cases, it is ridiculously expensive, in particular when
considering that most of it will never get repaid.
This
is especially true of the sovereign bonds of major governments, which
are probably among the worst ‘assets’ on the planet, yet are bizarrely
still considered ‘safe haven’ assets, a ridiculous concept to begin
with. What are the prospects in the long run for government bonds?
Remember that most sovereign states are now credit-addicts, desperately
relying on low rates and cheap credit to fund their incurable spending
habits, and increasingly leaning on their central banks to provide the
daily fixes. If the central banks stop printing money and thus stop
funding the governments, they go broke. If the central banks keep
funding the governments they will have to keep printing money, and this
will certainly lead to higher inflation at some point, and that point
may even be soon.
As an investor you
will ultimately lose money through default or through inflation, and if
it is a hyperinflation there will be default at the end of the
hyperinflation. For the bond investor the choice is between death by
hanging and death by drowning.
If
that sounds overly dramatic then ask yourself in what scenario you win
or even get your money back. Only if the present policies lead to a slow
and steady return to self-sustaining growth that is inflation-free and
allows the central banks to slowly and painlessly remove accommodation
and deflate their overgrown balance sheets, and if the political class
then grows up and gets sensible, departs from its free-spending ways,
gets the fiscal house in order, and starts paring back the debt.
Yeah, and pigs might fly!
That
this scenario is evidently the basis of much strategizing by
professional money managers does not say much about its soundness or
even remote probability. It is simply the scenario in which the
financial industry comes out unscathed, with its size, reputation and
income-stream intact. It is also the one scenario in which you need
little money – neither paper money nor gold – but can stay fully
invested in equities, bonds and real estate, as the rosy outlook of
seamless crisis resolution and onwards growth forever will ultimately
justify today’s lofty valuations. This is the scenario the financial
industry favours and has an overwhelming desire to believe in – as do
all politicians, central bankers and assorted Keynesians and other
interventionists. Good luck to all of them! I fear this is wishful
thinking rationalized with poor economics.
Every
day that the markets are open the US government borrows an additional
$4billion, roughly. For 5 years running the country’s budget deficits
were considerably in excess of $1 trillion. Britain is among the world’s
most highly indebted societies if you combine private and public debt,
and despite all the blather in the press about ‘austerity’, the public
sector keeps going more into debt. Japan has long been a bug in search
of a windshield.
Bond investors may
counter that it is all about the timing. Until death arrives, you
collect coupons. – Well, hardly. With yields for the bonds of major
bankrupt nations now in the 1 to 2 percent range, if that much, there
is, in my view, little point in sitting on a gigantic powder keg and
hoping the fuse is long enough. When this one blows, the fallout will be
substantial.
Why are bonds not selling off?
As
David Stockman has
pointed out, much of the US Treasury market is not owned but rented.
The big primary dealers and many hedge funds hold government bonds as
trading positions funded with cheap money from the Fed. That is the true
reason for the Fed’s new communications policy. Ben Bernanke now goes
so far as to promise to keep rates and therefore the trading community’s
funding costs near zero, not only for the near-term, but even beyond
the tenure of his own chairmanship at the Fed. The goal is to make sure
that these leveraged renters of Treasury debt stay engaged and help
funding the state.
Then there are the
big bureaucratic asset management entities that have historically
always provided a reliable home for government bonds: insurance
companies, pension funds, sovereign wealth funds, foreign central banks.
Built-in risk-aversion and intellectual inertia are here working in
support of over-valued bond markets. Here, the big investment decisions
are made by committees of professional fund managers who are often in
charge of obscenely large amounts of money. To beat the market and
achieve superior returns is an objective located somewhere between the
hugely improbable and the completely impossible. They are destined to
fail, and in this position of nerve-shredding uncertainty they all cling
to the same straws: 1) do what everybody else does; 2) stick to what
has worked in the past; 3) stick to the industry’s assumed wisdom, such
as ‘never fight the Fed’; ‘government bonds are safe assets because the
government can always pay’, and so forth. The last point has no basis in
theory and history, and looks increasingly like a heroic assumption
today, but that is the fund manager’s line and he is sticking with it.
That
government bonds are a safe investment can, of course, not be left a
matter of simple opinion but has to be enshrined in the laws of the
land, and the state’s rapidly expanding finance constabulary is already
working on it. Via legislation and regulation, the state is busily
building itself a captive investor base for its own debt.
The
state regulates the banks and has long been telling them that if they
want to lend their money securely they should give it to the state.
Everywhere, state-imposed capital requirements for banks can best be met
by buying government bonds. The advantages are obvious: Spanish banks
heavily increased their exposure to ‘safe’ Spanish government bonds over
the past year, from about 13 percent of their balance sheets to 31
percent. And what is safe for the banks is certainly safe for insurance
companies, pension funds and other ‘socially important’ pools of saving.
‘Capital controls’ is such a nasty term. Much nicer to call it
‘regulation’, and the masses have now been sufficiently indoctrinated
with the idea that the financial crisis was caused by lack of
‘regulation’ so that the state can now safely and calmly tighten the
screws.
I fear that to a large degree
this is even welcome by the asset management industry. In an unstable
and increasingly uncertain world, being told what to buy lifts a great
responsibility of one’s shoulders. Although individually many money
managers complain about stifling restrictions and regulations, it is
usually the case that any outsized boom industry, when faced with the
end of its boom, happily embraces state involvement to avoid getting
trimmed back by market forces too harshly. Rather than seeing the return
of the ‘bond vigilantes’ who instilled fear and loathing in debtors in
the 1970s and 1980s but who roamed the financial landscape of a
different age, one in which grown-ups were still allowed to smoke in
public, we will most likely be treated to the sad spectacle of timid
money mangers being herded into officially sanctioned asset classes by
the cocksure financial market police.
All
of the above may help explain why expensive assets may keep getting
more expensive but these are, in the end, mitigating factors only that
will, at the most, postpone the endgame but not change it.
One
popular way to rationalize investments in bonds is that they are
deflation hedges. Whenever the forces of liquidation and cleansing get
the upper hand, bonds do well. This may be the case in the short term
but any extended period of deflationary correction must be poison for
sovereign bonds in particular: tax receipts will drop, non-discretionary
state spending will balloon, and credit risk will rise. The bond
market’s pendulum of doom will simply swing from the risk of higher
inflation to the risk of default.
Gold versus other ‘real assets’ (equities and real estate)
It
is often argued that equities and real estate are also good inflation
hedges, and I know many people who prefer them to gold. I see the
rationale but disagree with the conclusion. Gold may
no longer be cheap because
what I explain here has been a powerful force behind gold for a decade.
But I would argue that equities and real estate are in general much
more overvalued as the current financial infrastructure is designed to
channel new money into financial assets and real estate but not into
gold, and our financial infrastructure has been operating on these
principles for decades. How many people do you know who not only own
gold but bought it on loan from their bank? Now ask yourself the same
question with respect to real estate. – Gold is the great ‘under-owned’
asset. Its share in global portfolios is miniscule. It plays hardly any
role in institutional asset management.
It
is true that during deflationary phases when the inflationary impetus
from central banks slackens a bit and the urge of the markets to
liquidate comes to the fore again, gold often sells off in sympathy with
equities. But I believe that any risk of a more extended period of
deflationary correction poses a much bigger problem for equities, and by
extension real estate, than for gold.
Additionally,
ask yourself how equities and real estate will fare in an inflationary
crisis or a currency catastrophe. Which companies will make money, pay
dividends or even survive? Which tenants, whether residential or
commercial, will keep paying the rent? I am not saying that all these
equities and all the real estate will become worthless – far from me to
forecast a ‘Mad Max’-style end of civilisation. It is indeed to be
expected that certain equities and select pieces of real estate will
turn out to be decent instruments for carrying wealth through the valley
of tears, and for coming out at the other end with one’s prosperity
intact. But which ones? It strikes me that the variance of outcomes is
much greater in these hugely heterogeneous, highly inflated and widely
held sectors than anything that can come from holding the eternal money
and homogenous commodity gold. If you consider any major economic
crisis, whether inflationary or deflationary, gold beats equities and
real estate in my book. (Equities and real estate are superior to bonds
and paper money, however, and this is why I listed them above as
potential holdings.)
Additionally,
there is one aspect of real estate investing that is, in my opinion,
frequently overlooked or underappreciated, and that is this one: Your
property is like a marriage agreement with the local taxman, as my
friend Tristan Geschex keeps reminding me. The War On Wealth is
intensifying, as are the fiscal problems of most states. Both go hand in
hand. Real estate is low-hanging fruit for the state, and taxation on
it will most certainly increase. What market value and rent-income your
property will manage to sustain through the vagaries of the crisis will
most probably be subjected to confiscatory taxation from a bankrupt
state. The ownership of gold could potentially also be restricted or
heavily taxed. This is certainly a risk. But as I said, gold is still
the under-owned asset, and there is still a chance that you can find
arrangements for your gold holdings that lessen the tax implications.
When the winds of change alter the political landscape in your country
of residence and bring the War On Wealth to a cinema near you, you may
still – if you are quick and lucky – pack your things, take your gold
and move somewhere else (as long as they let you), maybe even obtain a
different citizenship (as long as they let you), but owning property
means having nailed your wealth to the ground and having signed up for
whatever the local purveyors of snake-oil (politicians) manage to sell
your fellow voters.
Paper money versus gold
Under
what scenario would paper money beat gold, i.e. would the
paper-money-price of gold drop sharply? – The answer is clear, in my
view: If the central banks stopped the printing press and stopped
depressing interest rates artificially and fully accepted the
consequences for other asset classes and the economy. If the central
banks decided to defend the value of their paper money and credibly
assigned a greater importance to this objective than to the now dominant
ones, which are sustaining a mirage of solvency of banks and states,
funding the governments, propping up asset prices, and creating
short-term growth spurts.
The big
gold bull market of the 1970s ended harshly in 1980, when then
Fed-chairman Paul Volcker stopped the printing press, let interest rates
shoot up, and looked on as the economy slipped into recession. The
paper dollar enjoyed a revival and the gold price tanked.
My
view is that this is exceedingly unlikely to happen today. The global
financial system is considerably more leveraged than it was 32 years
ago, and presently much more dependent on never-ending cheap money from
the central bank. In 1980, the total debt of the US government was less
than $1 trillion, today the annual budget deficits are bigger than that.
The fallout from an end to free money would be huge, and most
politicians would deem the consequences inacceptable. Today, there are
also no other strategies available that could cushion the impact. In the
early 1980s, then-president Reagan countered hard money with an easy
fiscal policy, and simply let the budget deficit balloon throughout his
tenure. Today, the bond market would be quickly in trouble without
support from the central bank, and the government would soon face its
very own Greece-moment.
But even if
this were indeed to happen, I think that gold would still do better than
equities and real estate, and certainly bonds, which would suffer
hugely from rapidly rising default risk. The deflationary correction is
also a huge threat to the over-stretched banking system, which means you
may not want to hold your paper money in form of bank deposits. Again,
gold seems to be a decent self-defence asset, even in this scenario.
How to own gold
Personally,
I believe one should hold gold in physical form (bars and coins), not
through ETFs, derivatives or gold accounts. If one wants to have it held
within the banking system (not ideal but there could be reasons for
it), one should insist on having it in allocated form, that is, clearly
allocated to one’s name and identified by serial numbers. Or, have the
gold delivered and keep it in a safety deposit at a bank. Alternatively,
there are now a number of specialised asset managers or gold dealers
around that offer storage facilities as well.
I
think the risk of gold confiscation is small in most countries at
present but things may change. The risk of taxation on gold or
restrictions on gold ownership is somewhat higher. The safest places to
hold gold are probably Switzerland (still) and Singapore at present but
if you live in the wrong place or have the wrong passport, having your
gold there may not protect you from the long arm of your government when
it begins to show interest in your gold. It is no surprise that people
who really care about their wealth, which are often people who are very
wealthy, now consider changing residency and even changing citizenship
as an important component of their estate planning. The last time the US
government confiscated private gold, in April 1933, it only grabbed
what was held within the territory of the United States, and many people
probably kept their gold by simply burying it in the backyard. Believe
me, the next time private property will be confiscated, the process will
not be handled so amateurishly.
In any case, these are just my opinions. As I said, food for thought….
In the meantime, the debasement of paper money continues.
http://detlevschlichter.com/2012/11/some-personal-thoughts-on-surviving-the-monetary-meltdown/
Billionaire
investor George Soros, who as recently as late 2011 said gold was an
asset bubble, now appears quite bullish on the yellow metal and the
companies that extract it from the earth. During the third quarter,
Soros Fund Management LLC added to its investment in the SPDR Gold
Shares (
GLD), the second-largest ETF in the world by assets.
The firm raised its interest in GLD to 1.3 million shares from 884,400 shares,
according to an SEC filing
. Even at 1.3 million shares. Soros Fund Management owns a small percentage of GLD's shares outstanding,
which stood at 443.2 million as of November 14.
The filing also indicates Soros Fund Management has boosted its holdings of ETFs that own shares of gold miners. An
August SEC filing showed the firm held 1 million shares of the Market Vectors Gold Miners ETF (
GDX) and nearly 2.4 million shares of the Market Vectors Junior Gold Miners ETF (
GDXJ).
The
November filing indicates Soros has more than doubled his GDX stake to
2.32 million shares and now holds a sizable chunk of call options on the
ETF as well. The firm's position in GDXJ has not changed, according to
the filing.
Since mid-August, GLD has jumped 6.6 percent while
GDXJ has soared 5.7 percent. GDX has risen 3.3 percent over the same
time. Barrick Gold (
ABX), Goldcorp (
GG) and Newmont Mining (
NEM) combine for a third of GDX's weight.
Soros also slightly added to his position in the SPDR S&P Metals and Mining ETF (
XME).
The firm owned 350,000 shares of XME as of the August filing, but the
more recent November filing indicates that stake has risen to 353,400
shares and the firm also owns call options on that ETF.
XME does hold some gold miners, but the fund is heavily allocated to coal and steel names such as Peabody Energy (
BTU) and Nucor (
NUE). Soros also holds a stake in the Materials Select Sector SPDR (
XLB) as well as call options on that position.
Read more: http://www.foxbusiness.com/news/2012/11/15/soros-adds-to-gold-miner-etf-positions-raises-gld-stake/#ixzz2CuWWNN4D
Billionaire
investor George Soros, who as recently as late 2011 said gold was an
asset bubble, now appears quite bullish on the yellow metal and the
companies that extract it from the earth. During the third quarter,
Soros Fund Management LLC added to its investment in the SPDR Gold
Shares (
GLD), the second-largest ETF in the world by assets.
The firm raised its interest in GLD to 1.3 million shares from 884,400 shares,
according to an SEC filing. Even at 1.3 million shares. Soros Fund Management owns a small percentage of GLD's shares outstanding,
which stood at 443.2 million as of November 14.
The filing also indicates Soros Fund Management has boosted its holdings of ETFs that own shares of gold miners. An
August SEC filing showed the firm held 1 million shares of the Market Vectors Gold Miners ETF (
GDX) and nearly 2.4 million shares of the Market Vectors Junior Gold Miners ETF (
GDXJ).
The
November filing indicates Soros has more than doubled his GDX stake to
2.32 million shares and now holds a sizable chunk of call options on the
ETF as well. The firm's position in GDXJ has not changed, according to
the filing.
Since mid-August, GLD has jumped 6.6 percent while
GDXJ has soared 5.7 percent. GDX has risen 3.3 percent over the same
time. Barrick Gold (
ABX), Goldcorp (
GG) and Newmont Mining (
NEM) combine for a third of GDX's weight.
Soros also slightly added to his position in the SPDR S&P Metals and Mining ETF (
XME).
The firm owned 350,000 shares of XME as of the August filing, but the
more recent November filing indicates that stake has risen to 353,400
shares and the firm also owns call options on that ETF.
XME does hold some gold miners, but the fund is heavily allocated to coal and steel names such as Peabody Energy (
BTU) and Nucor (
NUE). Soros also holds a stake in the Materials Select Sector SPDR (
XLB) as well as call options on that position.
Read more: http://www.foxbusiness.com/news/2012/11/15/soros-adds-to-gold-miner-etf-positions-raises-gld-stake/#ixzz2CuWWNN4D
![[Most Recent Quotes from www.kitco.com]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_vb_Zm8XM7SAccH3R7QC41BvE-nNcz78BYfmeeQ8Lish4De52Caq9Xba1Fqzsz0id0D2KnzxecuseDgL390DKeztXs-RVAeqkXfWuFWjBuy-C3SGWI3Pxucv4nuOHK447Wkmw=s0-d)
![[Most Recent Quotes from www.kitco.com]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_v6rAkoOUzfUR-XYNjs-gatHGRREIZkV3WU58uD1o_DNjHTJ9dMySsadmG-S_AGX1oRF5-qiXm_M7NfWoq6zJqtx73MxtZwU4rsFHWyJ_9qfmplS39hcD59acjo3YkQDCHnfg=s0-d)
![[Most Recent Quotes from www.kitco.com]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_vB9kH0YlRv6Kk39x8GmG_D6VQGSDfCmxa_MRDB__qyEdrG64bT0J_9DF1xHs4pXl9IzGPlghe-QdB7GN9dvUMZP_U0ldRhPQ_ROoBdsxmt6834G2bBGKPSYmLSa47rlpwr=s0-d)
![[Most Recent Quotes from www.kitco.com]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_veUoCQ2C3NvC08ZpMI2WrsprCiRMGBYUO5TmbHRysQGUFfGxyOkH09rKQL-y6vnuBL-0pkf5VGTEWMWZAsNCdbJuSJGXNVsQP7GgCiRGIohrpEAyDzROK-ju6Bkt84etaBSw=s0-d)
![[Most Recent Quotes from www.kitco.com]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_scuCbfCuPFE-5VbS1av1Cv6Jo7MMWeH88my8t5di6lz3J4wNl_JmdUaNWJi35294yytyDBBBDmoCLafNfqZYGo4-lHxrZ2NXQ-wCmjGJYSHkpl0lnzvvV8eNxj9zzaWTS0HQ=s0-d)
![[Most Recent Quotes from www.kitco.com]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_sAhtrVoqhGFX81X8mqdWEOuYncKDlRjhNOiHqAPyMla_NSkkOXR5iEmGZhNl9fkAQgVRD41tHi1SrXAkBeoAIBCmfweeN_cqhL6d3erOAnS0QPJpvnBs4BaWDNxHJHJe1cig=s0-d)
![[Most Recent Quotes from www.kitco.com]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_sjo0yg8JC82mq4sBgo3TDvZG_QV4AXa4bJq2Czx4GJ47uLBIBwt65J4xDlUOyQXQPjLzc69U3SYtxt4oRh37q5IGP149OlP2JeR-7V2rct3t0goJ1Zi4P2X6zZA8I2gB_W3Q=s0-d)
![[Most Recent Quotes from www.kitco.com]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_vNRh3jOPYW6WlXu2-DG83exy9kGb6mtpY3P9DNKr7Y4jqYahyAGc4fyojk-HSpWnPfP7OBp9sIUlsY7VLsMGwN1Y-Y0JwpKlrojxcZ2FHyCxNWJvsD4bXAwn6MNaNSgvgRwg=s0-d)
![[Most Recent Quotes from www.kitco.com]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_vzm6SSGPddII2UbFFNM6NhVTMfr-QENCM9qSdtFPEjvU-Fq4Jbroo-vwMopqp54nxtch9oW0WyoIqWQf7edzfDhcQovUxoQLElxoKXEZu7ufmY3p3JbZ4SnjreRRZvbuh6lg=s0-d)
![[Most Recent Quotes from www.kitco.com]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_sb5Y_IlAI2dv_Wl-6R9IyeWnhjc0au3MXvXYNVR6ddGQCnbYf7hqQyOMCM-Q_8EwS_caZCzl8tvtkWJW6xKeqhlnbmkFMRCdktw9afjCejgX6fHpS6lZQbq6kbqMiM2sjp=s0-d)
