HSBC’s David Bloom: “Gold Is The Only Safe Haven Asset That Will Not Do QE, Put In Capital Controls Or Complain”

Switzerland’s Currency Move Could Boost Gold

We asked last month:

Will Easing By The Swiss Central Bank Drive Investors to Gold As The Only Safe Haven?

HSBC’s head of foreign exchange strategy – David Bloom – says yes.

“Gold Is The Only Safe Haven”

Bloom told BBC last week:

The real beneficiary [of Swiss and Japanese easing] – which never complains, never prints itself – is gold.

And he told the Telegraph today:

The market must fear this will lead to a sharp escalation in currency wars. Gold is the only safe haven asset that will not do QE, put in capital controls or complain.

For an in-depth background on gold, see this, this, this, this, this, this, this, this and this.

Note: We are not investment advisers and this should not be considered investment advice. Personally, many of us are long gold.

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  • But most people do not own gold physically, just titles, and these are as good (or bad) as fiat money. For example the Fed owns no gold, according to this video and yourself have already mentioned in the past that there seems to be not so much actual gold in the market.

    So the only safe gold ownership seems to be that of physical gold but most gold investors do not have much or even any at all of that (and is surely impractical and dangerous anyhow). While I understand well why would people seek refuge in gold, the fact is that all them only own fiat gold, which may happen to no exist at all.

    I’d say it’s as much of a risky investment as any other, if not more. Instead, and assuming no revolutions suppress all forms of private property in the short or mid term, investing in alternative energy like solar or wind may be a safe value.

    By the way, what happened with the rare earths’ market? People buy gold but then there’s all those other materials that are usually even more serious investments like rare earths, tungsten and all that.

    I have the heartbeat that buying gold is unimaginative and looks more and more like a risky market to me: too much people buying the same stuff (on paper).

  • BTW, how can I get feedback for comments? I see no button or link anywhere.

  • Gold is a ROCK!

    I have much more faith in the productive capacity of governments and people than I do in their beliefs about a ROCK which is neither more or less than most other rocks. Gold does have extensive uses in industry and as jewelry but there is not enough of it in the world to use as a currency.

    Our economic problems are not caused by fiat currencies. They are caused by income inequality. Governments unwilling to put forth economic policies that ensure more equilateral income distribution in favor of trickle down economics are creating a situation where larger and larger numbers of people are having to do with less and less available currency without some form of QE.

    I agree it is time to slow the printing presses and only turn them on as is needed. What is also needed is economic policy that quits pushing the worlds wealth into increasing less hands and redistributes it back to the consumer class who are what makes consumption based economies work.

    This is simple to do by increasing minimum wages, negating free trade and establishing fair trade, and progressive taxation to encourage horded wealth to stat moving and producing again.

  • jo6pac

    Wow I’m just excited that I can comment

  • joe

    Never actually read the actual sequence of events that makes gold such a great hording device. Please apprise the end result, my take: World economies tank and everyone who was smart enough to buy gold are the only ones left merrily walking down the aisles of the supermarket, while the rest of us suffering fools are outside looking in with our little noses pressed against he window?