Kyle Bass: I See Gold As Another Currency

Words of wisdom by the successful investor Kyle Bass who founded hedge fund Heyman Capital. In what we consider a short but extremely powerful interview on Bloomberg, he actually makes the case for gold in just 2 minutes. Likewise, in this short article we refer to the interview with the best quotes.

What Kyle Bass has to say about the current (low) gold price:

We always have had a position to gold. Monetary policy happens to be the only game in town. I am perplex why gold is as low as it is. I don’t have another answer to this other than you should maintain a position.

What Kyle Bass has to say about the link between the monetary base and gold:

The monetary base is close to 17 trillion dollar. All the gold in existence is about 7 trillion dollar. At some point in time I’d much rather own gold than paper, I just don’t know when that time is.

Now we consider the following quote as the key aspect of gold. Worse, it is the most misunderstood concept related to gold today.

They can mine some more gold, but they can’t print gold at the rate the central bank is printing money. I see gold as another currency, it’s that simple; I don’t view it as a commodity.

And Kyle Bass his answer on the question of the journalist if he prefers to own gold rather than US treasuries?

Answer: I do.

We keep on repeating that the biggest misconception about gold is its monetary value. Case in point: the latest research report by Société Générale. In Société Générale Calls The End Of The Gold Bull Market … Again we wrote that “the French bank considers neither debt nor the monetary aspect of gold as drivers for the gold price.”

Here you have a top investor who is running one of the most successful hedge funds in the world coming out on television to state that he sees gold as another currency, not as a commodity.


Related to the current gold price, the other interviewee lays out that there is sold support for gold at these price levels because of three reasons:

  1. The latest economic surprises are mostly into negative territory.
  2. The dollar is trading against major resistance.
  3. Japan is doubling its balance sheet in the next 2 years and the US continues its easy monetary policy.

We came to the exactly the same conclusion in our latest Gold & Silver Market Review.

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