I would like to see CNBC carry this story...
Regards - VHF
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Managers trust gold for ultimate protection
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Story by: David Pawsey
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Magazine: Financial Adviser
- Published Thursday , August 13, 2009
US fund managers are buying gold to protect their personal wealth against excessive inflation, according to Moonraker Fund Management.
After interviewing 22 hedge fund managers during a factfinding trip to the US, Jeremy Charlesworth, chief investment officer of Moonraker and manager of the Moonraker Commodities fund and Global Opportunities fund, discovered the majority were buying gold to protect against the effects of quantitative easing in the UK.
Mr Charlesworth said there was a fear this policy would eventually result in a bout of steep price increases.
He said: "Gold is the ultimate currency, performing best when economies are at extremes, whether that is inflationary or deflationary. The managers I met in the US know that if the politicians get the quantitative easing programme wrong then the value of money relative to real assets will dwindle.
"History is littered with such instances. Governments have a track record of destroying the value of money over the long term and currency devaluation is a relatively painless way for them to reduce the value of the enormous debt that is hampering economic recovery now.
"Everyone agreed that sentiment is better than it was a few months ago but none of the structural problems have yet been fixed. Double-digit inflation two or three years down the line is a very real possibility."
Nigel Speirs, chief executive of Whales-based IFA Buckles Investment Services Limited, said inflation was a danger but he thought double digits was rather an alarmist forecast.
He said: "Gold is always seen as a hedge against inflation but we are all slightly more worried about quantitative easing ending."
