Friday, 01 Oct 2010 01:35 PM
By: Dan Weil
The Chinese economy is poised to surpass the U.S. economy
later this century, and that makes gold a much wiser investment
than the dollar, says Tom Winnifrith, CEO at financial-services
firm Rivington Street Holdings.
"America is practically owned by China," he told CNBC. China is
the largest foreign holder of Treasuries, with $847 billion as
of July.
The U.S. government isn’t addressing the trade deficit and the
exploding debt burden, Winnifrith says. There’s a parallel to
the collapse of Britain’s empire in the 20th century, he says.
"America is doing what Britain did," Winnifrith said. "America
spends much more than it can afford, and it's not addressing the
issue."
China and India represented the world’s two biggest economies in
1832, and that ranking will repeat itself by 2032, he says.
"The 200 years when Britain and the U.S. were the top two
economies were an aberration, and that will change," Winnifrith
said.
"The decline of empires has happened much faster than folks
think. I believe that gold will be a far better bet in 20 years
than the dollar."
Winnifrith isn’t the only expert bullish on gold, which has
reached a record high of $1,322 an ounce. Hedge-fund legend John
Paulson holds 80 percent of his assets in the precious metal.
Given his expectation – and that of others – that the Federal
Reserve will expand its quantitative easing, Paulson says gold
could hit $2,400 an ounce, Gold Alert reports.
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