By Scott Carter, CEO of PM Capital
I recently read a quote by Li-Ka Shing, the richest man in all of Asia—a 35 times over billionaire. He said “Vision is perhaps our greatest strength… it has kept us alive to the power and continuity of thought through the centuries, it makes us peer into the future and lends shape to the unknown.”
What is his vision today? To buy gold. For the first time ever, according to an interview posted on zerohedge.com, this uber wealthy Hong Kong businessman and philanthropist is aggressively buying gold-related assets.
Other billion aires are doing likewise. They are adding gold and gold-related assets to their portfolios.
Why now? I could make a case that as conflicts around the world intensify and geopolitical black swan events or World War III become ever more possible, people are flocking to gold, knowing that it is a better form of money than fiat currencies. Or I could argue that the global debt is so out of control that at some point there will be a financial collapse around the world. Or that demand for gold is rising and with greater demand usually comes higher prices.
But those in the know with these billionaires say they are focused on one thing only—that gold is a trusted and secure insurance for their multi-billion dollar portfolios. They are not concerned about the price on any given day. It is long-term protection and preservation of their wealth. Period.
They’re focused on one factor that we seldom think about… We’re so fixated on price of gold… what they’re focused on… what the super wealthy are focused on… what the billionaires are focused on… is the fact that gold plays that hedge in your portfolio… that’s it’s the insurance in the portfolio…
It may not necessarily be as critical to think whether it’s $1200 an ounce or $1300… we fixate so much on the price… and we forget that irrespective of what it’s trading at on any given day it’s meant to be an insurance policy… it’s meant to be protection of wealth and preservation of wealth…
The billionaires are buying. And so are countries. For the past few years, central banks around the world have been buying, holding and in some cases repatriating the precious metal. Nearly 20% of all the gold ever mined is now owned by central banks. China and Russia, in particular, have been gobbling up gold so it’s no surprise that now, according to the interview and article, China and Russia are bypassing the U.S. dollar and phasing in a gold-backed standard of trade.
As steel magnate billionaire Andrew Carnegie says, “As I grow older, I pay attention less to what men say. I watch what they do.”
Are you watching?