Ron Paul has long been known to make rather bold statements on the U.S. economy. And while he has continued to run for President in recent years, with each campaign being more successful than the last, his views have also made him a popular name in the investing world. Particularly in the precious metals space, Ron Paul has had a lot of sway in recent years with his comments on gold and silver. But he does not stop at just making comments on these two commodities, he takes it a step further and puts his money where his mouth is [for more commodity news and analysis subscribe to our free newsletter].
The former Republican presidential candidate owns no bonds or fixed income exposure, and has just 0.1% in equities. So where does all of his money go? Gold and silver miners. Mr. Paul has approximately 64% of his total assets invested in miners of both gold and silver, with big names like Barrick Gold (ABX), Newmont Mining (NEM), and Goldcorp (GG) all making an appearance. He also owns a large number of junior miners with around 5% of his assets invested in those that fall under the microcap umbrella.
“At our request, William Bernstein, an investment manager at Efficient Portfolio Advisors in Eastford, Conn., reviewed Rep. Paul’s portfolio as set out in the annual disclosure statement. Mr. Bernstein says he has never seen such an extreme bet on economic catastrophe” writes Jason Zweig. Bernstein went on to call the portfolio “a half-step away from a cellar-full of canned goods and nine-millimeter rounds” [see also Doomsday Special: 7 Hard Asset Investments You Can Hold in Your Hand].
It appears that Ron Paul is making a large bet along with the likes of Peter Schiff and many other investors, as his portfolio is geared towards rampant inflation and a devaluation of the dollar. As helicopter Ben continues to print money and pump it back into the economy, it is only a matter of time before the dollar is forced to feel the negative impact. That, coupled with inflation, could lead to an economic crisis in the U.S., but not for precious metals and their producers. Mr. Paul is clearly counting on tough times ahead for our nation’s economy, do you agree? Let us know in the comments below.
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Disclosure: No positions at time of writing.
A slight typo, it is Dr. Paul.
Acknowledgement of ignorance is the greatest wisdom. No one knows the future and investing as though you do is a Vegas roll of the dice. Fortunately Dr. Paul will have a generous congressional pension.
Wait just a minute …. Let’s use ETFs for simplicity.
SPY = S&P500
GDXJ = Junior Miners
Today the Dow is down 205 points.
SPY is down 1.57%
GDXJ is down 1.25
So if Armageddon arrives, we agree that gold/silver will hold up well.
But if the world doesn’t come to an end and the US/world economy just bumps along,
SPY has a dividend of 1.96%.
GDXJ has a dividend of 5.06%
Heads, Mr. Paul wins.
Tails, Mr. Paul wins.
A thoughtful investment in gold and silver can do well in inflation …and in deflation.
Managed properly, Mr. Paul will be able to buy more beans and ammunition!
[...] grim outlook for the global economy, commodities closed mostly lower today. Copper along with precious metals posted the biggest losses, while crude oil futures also took a steep [...]
[...] Jared Cummans: Ron Paul has long been known to make rather bold statements on the U.S. economy. And while he has continued to run for President in recent years, with each campaign being more successful than the last, his views have also made him a popular name in the investing world. Particularly in the precious metals space, Ron Paul has had a lot of sway in recent years with his comments on gold and silver. But he does not stop at just making comments on these two commodities, he takes it a step further and puts his money where his mouth is [for more commodity news and analysis subscribe to our free newsletter]. [...]
[...] 4. RBS Gold Trendpilot Exchange Traded Notes (NYSEARCA:TBAR): One of the most unique funds on the market, TBAR takes gold investing in a different direction. TBAR invests in gold bullion when the price of gold closes above its 200-day simple moving average for at least five consecutive sessions. Meanwhile, when gold is below that threshold for five consecutive sessions, TBAR’s underlying index switches exposure to 3-month Treasury bills. TBAR also features a unique expense structure; when the index is invested in gold–as it is currently–expenses will be set at 1.0%. When the benchmark is invested in cash, however, expenses are cut in half to 0.50%. This one-of-a-kind methodology has returned just over 7% in 2012, although it should be noted that the fund comes with a price tag of 100 basis points [see also Inside Ron Paul’s Gold and Silver Portfolio]. [...]
There are a number of juniors in Mexico that are starting production – less risk in the coming months and a good way to spec the price of silver. http://www.ampgoldportfolio.com highlights Silver juniors on Nov. 1
In my humble opinion,I believe as Ron Paul does.I returned tonight from a week long visit to Washington DC.I stayed at a moderate Holiday Inn.Even with a gold card membership,Breakfast was $25.00 for two,without tip.Lunch at the Museum was about the sameEntrance to Hillwood House,home of Merriweather post was another $25.00.Point is I had nothing to show for money spent. I purchased a lovely Teapot made in the finest china Co. in Russia for $75.00.The pot has name of co.baked in. Value of Products are worth more then EATING.My conclusion.No matter the price of Silver or Gold. The VALUE will go up,as rent,food and other things we need cost more.