Sorostiltskin Spins Paper Into Money But Not Paper Into Gold
I take issue with this WSJ article, mostly because the headline makes it sound like Soros took a truckload of gold coins and hocked the entire thing. As far as I am concerned, paper is never a "safe haven" investment, especially when you are dealing with an artificially overinflated supply such as that allegedly backed by physical gold.
Gold prices fell after the hedge fund controlled by George Soros disclosed it had dumped almost all of its holdings of the precious metal.
A stronger dollar also pressured gold down. Although both are considered "safe haven" investments and in the past have moved in tandem, the perception that gold is overvalued has driven a wedge in their relationship.
Gold for May delivery was up $15, or 1%, at $1,475.40 a troy ounce on the Comex division of the New York Mercantile Exchange.
Soros Fund Management said late Monday in a securities filing that it sold 99% of its stake, or 4.7 million shares, in exchange-traded fund SPDR Gold Trust in the first quarter.
The shares sold were worth $680 million based on Monday's prices. However, gold prices averaged slightly less in the first quarter, so Soros's take could have been smaller.
Right. Shares. If I hold 4,265 pieces of paper with "Federal Reserve Note" written on them and the underlying "value" of said pieces of paper is debunked and declared worthless (a completely possible scenario in a faith-based system), the varying value of those notes is, well, worthless. It doesn't matter if they are $100s or $20s or $1s if all I'm left with is 4,265 pieces of paper with pretty pictures drawn on them.
Soros Fund Management owned 49,400 shares of GLD at the end of March. This most recent sale dumped 99% of the fund's holdings, or 4.7 million shares.
Now let's see him put all that $680 million into Treasurys.