Agoracom Blog

Hege Fund Legend, Julian Robertson, Paints The Case For Gold – Serious Inflation + US Armageddon If China/Japan Stop Buying Debt

Posted by AGORACOM at 9:31 AM on Monday, September 28th, 2009

(The following quote via TraderMark)

Julian Robertson is a legend; when he speaks – I listen.

Robertson had the best hedge fund record throughout the 1980s and 1990s. It is reported that the compound rate of return to his investors was 32%. During his active years, he was considered to be the “Wizard of Wall Street.” His hedge fund, Tiger Management, became the world’s largest fund, which peaked at over $23 billion invested.

He seems to appear on CNBC once a year, this is our opportunity to learn via osmosis.

(a) Nailed it —> [Oct 30, 2007: Julian Robertson Calling for “Doozy of a Recession“] <— market, as a “forward looking indicator” was at all time highs
(b) Nailed it —> [Oct 13, 2008: Julian Robertson Buying Some of Our Names – But Bearish on Economy]


A few days ago, Mr. Robertson appeared on CNBC TV a couple of days ago and his comments have really caught the attention of online investors.  (Peter Grandich, AGORACOM Chief Commentator, would love him).  I’ve provided you with an 8-minute clip of the interview, which is worth its’ weight in gold given his track record.  Some of his comments include:

  • We’re in for some rough waters. The recession is temporarily over but the US has not addressed its problems
  • The US can’t possibly pay back its debt
  • Tragic that US leadership has put the country in this position
  • Correct course is to scale back, stop spending and start saving
  • It’s almost Armageddon if China and/or Japan stop buying US debt
  • Inflation risk is much higher than deflation
  • 6-7%  interest rate is conservative … we could easily see 15-20%
  • Chinese don’t want to stop buying our bonds – but there could be circumstances where they have to
  • His solution would cause temporary pain in America. People will have to ask for it because government won’t.
  • Japan could be forced to sell some long-term US bonds, which is much worse than not buying
  • China is buying short-term debt because US can’t sell long-term debt.  History has shown that short-term borrowing is fatal.
  • US has yet to attack their problems.  “Stimulating” is just spend and borrow in disguise.  US needs to stop.

Drawing my own conclusions, gold would absolutely benefit from both high inflation and a loss of confidence in US debt, which would have to mean a loss of confidence in the $USD.  What were once fringe scenarios are now very plausible scenarios.


4 Responses to “Hege Fund Legend, Julian Robertson, Paints The Case For Gold – Serious Inflation + US Armageddon If China/Japan Stop Buying Debt”

  1. AGORACOM says:

    Hi, Robert. Thanks for the great words and the question. The show is now up on both of our blogs. It was video from the conference, so we had to bring it back to the office and do some editing before we got it up.

    Voila and thanks!


  2. Robert C. says:

    Thanks for all the good work…but where can I get this week’s Friday show with Peter that took place on Saturday from the floor of the Cambridge Conference in Toronto??
    Robert C.

  3. AGORACOM says:

    Thanks, Robert. My job is to get the best information into your hands. Glad you found it to be so valuable.


  4. Robert C. says:

    Good interview…and very good review of the interview. I absolutely agree with you that “gold would absolutely benefit…” from this horrific mess. Thanks
    Robert C.