Mega Hedge Funds Eye Gold as Governments Keep Printers Going

Colin Muller

Major hedge funds Elliott Management, Caxton Associates and Dymon Asia Capital are bullish on gold (XAU), the Financial Times reported today. This is due to “unfettered fiat currency printing,” according to Danny Yong of Dymon Asia Capital. Elliott in particular is one of the top ten hedge funds, ranked globally by the amount of assets under management.

The context of this emerging preference is a concern that recent measures taken by central banks of nearly all countries around the world will dilute the values of their respective currencies, triggering inflation.

Of course, these measures have come in response to the COVID-19 epidemic and its economic consequences, with the global economy decimated due to a collapse in global demand for commodities, which has led to an unemployment crisis. Governments have stepped in to shore up their financial sectors as well as the so-called “real economy”.

a “fanatical debasement of money by all of the world’s central banks”

Elliott Management

Many economists have and will argue that such monetary policies are necessary and the only cogent response to the growing crisis. For them, the real question is how to use the brief window of stability they have bought; some argue for aggressive fiscal spending married to the monetary relief.

Massive hike in gov debtSource: Federalreserve.gov

No matter who is right, the effects on government debt cannot be denied. Taking the US as an example: per the Federal Reserve's government website, government debt has rapidly ballooned during 2020 from $4.1 to $6.6 trillion — and this does not even take into account $3 trillion in direct aid to U.S. citizens.

Gold, and now Bitcoin, are seen as natural responses to such concerns of inflation caused by excessive money creation. Investors see the precious metal, and to a certain degree the flagship cryptocurrency, as a hedge against currency debasement.

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Ripple’s Success as a Payment Company May Not Benefit XRP, Says Pompliano

Michael LaVere
  • Morgan Creek Digital co-founder Anthony "Pomp" Pompliano is a strong supporter of Ripple as a payment protocol company. 
  • Pomp remains unconvinced whether Ripple's success will ultimately benefit XRP as an asset for investment. 

Morgan Creek Digital co-founder Anthony “Pomp” Pompliano believes that Ripple’s success as a payment protocol may not benefit XRP in the long run. 

Speaking on the latest episode of The Pomp Podcast, Pompliano outlined his reasons for being a fan of Ripple. According to Pomp, Ripple excels as a blockchain-based payment company that has managed to forge relationships with banks and financial services across the globe. 

However, Pompliano remains unconvinced of whether Ripple’s overall success will translate into benefits for XRP. 

He said,

What I don’t understand, and I think where I choose to not engage on the XRP side, is I don’t understand why people are buying it, speculating on future price movements.

Pomp explained that he saw the advantages of using XRP in the Ripple ecosystem, but was skeptical of the cryptoasset for investment. 

He said,

To me, if Ripple is successful, that doesn’t mean XRP has to be successful.

Pomp continued, saying that if you separate XRP and Ripple, the latter’s ultimate goal is to build better software for banks. He called Ripple’s mission a “no-brainer,” “venture capital bet” and admitted to being jealous of missing out on investing in Ripple’s seed round. 

Featured Image Credit: Photo via Pixabay.com