John Paulson is now one of the richest men in the world and one of the most successful Wall Street traders based upon his bet that the housing market was going to come a part. According to the Wall Street Journal, John Paulson is now taking some of those winnings and building an investment portfolio with the belief that gold is going much, much higher than $1,150 per ounce.
While the gold supporters are happy to hear this news, the one thing I keep thinking about is that when he “shorted the housing market” in a massive way in 2008, I don’t recall hearing much about him and his investment beliefs. Now that it’s out in the open, perhaps it’s just too conventional.
There are those who believe the U.S. Dollar is going to collapse and that gold is going to the moon. Perhaps those folks are right, but it seems like the whole world believes the U.S. Dollar is going to zero and every other ad on the radio is some vendor selling gold.
Let’s see…conventional wisdom in 1999 is that the internet changed everything and that earnings no longer mattered. It was a New Economy. Then after than crashed and everyone moved in to real estate, people said that housing never goes down….and then that crashed and about put us in to a Depression. Now they say that the U.S. Dollar is going to collapse and that gold is going to $2,000, or $5,000 or $10,000 per ounce. This last scenario has yet to play out fully. I can see why people think this is going to happen because of the way the Obama Administration and Congress are spending money, but when the whole world is on one side of the trade, I say beware!