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Minerd: Hedge the Currency

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  • Description

    Guggenheim Partners CIO Scott Minerd weighs in on gold prices, the European debt crisis and the economy.

  • Duration 4:40
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I says should be tailor made for -- right currency neutral shelter from a financial storm clearly that has not been the case here away and Scott -- Giving up our.

Oversees about 125 billion dollars in assets under management.

I this -- to start with gold Scott because that is the one thing that anybody and everyone is asking me about.

Well.

-- you know we've had quite a setback we've been at this level before in the last few months.

Gold -- and a long term bull market that is generational nature were probably about half way through.

That bull market at this point.

But bull markets are often punctuated with periods of high volatility and sharp sell -- I think there is some more downside risk -- in gold in the near term maybe even a -- us you know thirteen fifteen to 14100.

But ultimately when you look out over a period of five to ten years I think that it it is the currency substitute.

That will make a lot of sense for investors -- Hedge themselves against a long period of inflation which would probably will face.

At some point in time.

Do you worry though about these -- this selling feeding on itself out because it's it's it's hard to know exactly who -- it.

In terms of individual investors are people who.

Are hard not do not have the stomach for a 60% drop in just a few month do you worry that that -- -- continues and I guess.

-- you maybe go even lower than what you're expecting in the near term.

I don't think so I think that that would be a pretty hard sell off from here.

You know we're talking about another potential 10% or so some people would say.

-- -- you know why are you why would you recommend it if you think there's another ten to ten or 15% and downside.

And the reality is that you know these sorts of markets are very difficult to find or to pick bottoms and but I think you have to go with the trend.

Scott in terms of its a resolution.

To the European crisis.

Do you think ultimately ended the leaders there have been backing away from this.

That the ultimate.

Resolution.

Comes from the European Central Bank to simply stepping in and stopping out all of this sovereign debt.

I don't.

Think -- that the ECB will step in and by up the the debt directly.

What I see going on here is.

You know a path that were on to put some structural reforms in place.

She eventually.

Will reach a point where.

The ECB feels that there's enough of a structural.

Solution in place that he can become more accommodative.

And I think that the agent.

To help out these nations will end up being the -- -- math.

But the interesting piece of the story is where we'll be IMF get its money.

Ultimately I think the IMF will borrow the money from the ECB but the ECB will not want to be seen.

Directly intervene in buying so sovereign debt.

In and around our economy.

Is looking better by the day and specifically that jobless claims number that came out this morning it fell to about three and a half year -- Scott do you think -- that can continue into the new year for us.

Well I think out that the momentum we have a strong wind behind -- back -- in.

You know it was funny the last time I was on with you a couple of weeks ago just before the payroll reporting that -- report -- I talked about the household survey.

And how the households survey is giving us an indication that jobs are growing a lot faster than the payroll sir.

We are probably adding about 300000.

Jobs a month and that's very very robust job growth.

And with that kind of momentum behind this I think that it will I'd give us growth going through the first and second quarter but you still like European equities better than US equities there.

Well.

You know it's like falling it's like catching a falling knife.

I would still be a buyer of European equities but you know again I would tell people that hedge the currency because.

At 130 on the Euro we're gonna see a much lower Euro here over the next twelve months probably in my mind we'll get to parity at some.

I hope because they're not planning a trip to pair us Scott thank you I'm waiting thank middle -- -- -- -- -- -- what they're counting on you they need the running.

There Scott was great to see thank you for being here this morning.

My.

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