Soros Gold Bubble Expanding as ETPs Hold 9 Years of U.S. Output
By Nicholas Larkin and Pham-Duy Nguyen - Nov 22, 2010 10:26 AM CT
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Gold may rise as high as $1,500 next year according to the median in a Bloomberg survey of 29 analysts, traders and investors. Photographer: Chris Ratcliffe/Bloomberg

 
George Soros, chairman and founder of Soros Fund Management LLC, speaks at an open discussion at the University of Hong Kong in Hong Kong, on Feb. 3, 2010. Photographer: Jerome Favre/Bloomberg


John A. Paulson, president of Paulson & Co., attends the UJA Federation of New York's annual Wall Street Dinner in New York, Dec. 16, 2009. Photographer: Rick Maiman/Bloomberg


Paul Touradji, founder of Touradji Capital Management, poses in the company's headquarters on Park Avenue in New York, on March 11, 2009. Touradji's $1.8 billion hedge fund was one of the few winners in 2008. Photographer: Bill Cramer/Bloomberg Markets via Bloomberg

Gold’s 23 percent surge this year to a record is proving no deterrent to George Soros, John Paulson and Paul Touradji, whose investments signal more gains for the longest winning streak in at least nine decades.

Securities and Exchange Commission filings this month by Soros Fund Management LLC, Paulson & Co. and Touradji Capital Management LP listed investments in gold as their biggest holdings. Exchange-traded products own 2,088 metric tons, equal to nine years of U.S. mine supply, data compiled by Bloomberg show. Precious metals will produce the best commodity returns in the next year, Goldman Sachs Group Inc. said in a Nov. 9 report.

The purchases show how investors are snapping up hard assets as governments and central banks led by the Federal Reserve pump more than $2 trillion into the world financial system. Gold in exchange-traded products, as much as half of which may be held by individual investors according to BlackRock Inc., is equal to more bullion than the official reserves of every country except the U.S., Germany, Italy and France.


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FROM THE TELEGRAPH

China may be bigger economy than US within two years


Here’s a finding that will have any red-blooded American spluttering into his cornflakes. According to the Conference Board, a highly respected economic research association, China will overtake the US as the world’s biggest economy by 2012, or within two years.

OK, so in dollar terms, that’s obviously not going to be the case. It will be a lot longer than two years before China overtakes the US on that measure. But in terms of purchasing power parity, according to the Conference Board’s latest world economic outlook, China is already nearly there, and by 2020 will have reached a size of output which is nearly half as big again as the US.

Here’s the Wkipedia link explaining what PPP is, but broadly speaking the idea is to measure output according to the volume, not the price of goods and services produced. The assumption made is that identical goods will have the same price in different markets. In practice, this is obviously not the case. A taxi ride in Beijing, for instance, will cost you approximately a tenth of what it costs in London. But it is essentially the same service.
In any case, in PPP terms, the Conference Board’s projections show China as 24.1 per cent of world output by 2020, and the US at just 14.8 per cent.


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