Anthony Scaramucci: Gold Is Only a Short-Term Hedge

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(Kitco News) - Gold is a near-term safe haven asset, said Anthony Scaramucci, but the hedge fund manager and former White House Communications Director sees potential in other assets on a longer-term basis.

"It's a near-term safe haven but long-term it really doesn't solve people's problems," Scaramucci told Kitco News. "I would prefer to put the money or the capital into assets that I think are actually going to return something as opposed to be waiting for other people to think it's more valuable to me in terms of where my entry point is."

Scaramucci noted Warren Buffett's view on gold, which is that the yellow metal's value is derived from its finite supply rather than contribution to productive economic growth.

"I just remind people that are investors of what Warren Buffett said about gold. All of the gold ever mined you can put it in a cube, it's worth ten ExxonMobils and probably all of the farmland of the United states multiplied by ten. Would you rather have all of that productivity or this heavy cube of gold?" he said.

On the gold standard, Scaramucci said that historically, the economy has seen the best stability during times when currencies were anchored and fixed.

"Where we have done our best in terms of global commerce is where we've had some agreements related to purchasing power parity. Where we're doing our worse is where we have people manipulating their currencies," he said.

Scaramucci gave several notable examples of successful nations fixing their currencies, including China pegging the yuan to the dollar, and Germany linking the Deutsche Mark to the southern European currencies.

The trade war is going to force a lot of countries to manipulate their currencies in order to stay ahead, and this would be possible without an anchoring of currencies, like a gold standard, he said.

"You're seeing what these guys are doing: they're going to manipulate their currencies. Germany is weak, economically, South Korea, you're seeing that data that's not so great, Japan's data's not great, and what I'm fearful of is the doctrine of unintended consequences; a full blown trade war with the two biggest trading partners and the two biggest economies could touch off an unnecessary global recession," he said.

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This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.

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