He Lied Right To My Face!

| February 22, 2010 | 0 Comments

The stock market has always had a seedy underbelly.  Less than desirable characters are always trying to make a quick buck off the uneducated and inexperienced.  Just look at Bernie Madoff or Jeff Skilling of Enron fame.  Both these guys would steal candy from a baby if it could make them money.

Some con men are sneaky and conniving.

They hide their true intentions.  They’re working the angles and hiding important details.  They’re always slicked back and slimy.

You know what I mean… just think of people like used car salesmen, horse traders, and penny stock CEOs.

They’ll lie to your face and not think twice.

The real tragedy is when someone who was supposed to be a good guy lies.  We’ve all seen it.  The trust is lost instantly.  Once a trust is broken, it’s gone forever.

Recently, we were lied to.

And the lie was told by one of the good guys.  One of the greatest traders of all time.  I guess his quest for the almighty dollar has clearly shaded his views.

Who am I talking about? George Soros of course.

I’ll tell you about his big lie, but first a little background.  Soros is a famed hedge fund manager who’s been playing the markets for decades.

In 1952, he attended the London School of Economics.  After graduation, he started his career at a London merchant bank.  A few years later he moved to New York City.  By 1956, he was working for Wertheim and Company where he cut his teeth as an arbitrage trader.

In 1973, he established the Quantum Fund.

His partner in the Quantum Fund was another famed investor – Jim Rogers.  Over the years, the Quantum Fund has been responsible for some huge profits.  What really put Soros on the map occurred on September 16, 1992.

Building up to that day, Soros had sold short almost $10 billion worth of British Pounds.  He was placing a huge and leveraged bet.  The other side of the trade was the Bank of England.  They had been artificially supporting the value of the currency.  Soros knew it was poised to fall.

On the 16th, the Bank of England devalued the currency and Soros became a legend overnight.  He made $1.1 billion in a single day.  And he received the title, “The man who broke the Bank of England.”

Soros has also become a great philanthropist.  He’s given away millions to worthy charities and support organizations.  That’s why he’s the good guy.

But clearly Soros is a trader first and foremost… and that’s why he lied.

Everyone knows about the credit and economic crises.  They’ve been circling the globe for more than two years now.

In an effort to combat the recession, governments all over the world have been spending money like drunken sailors.  To fund all this lavish spending, the currency printing presses are running like mad.

This is true not only in the US, but in countries around the world.

As a result, many investors fear inflation and currency devaluation. The best asset to own during times like this is gold.  Everyone knows it. That’s why gold is trading for more than $1,000 an ounce right now.

Even Soros knows we should be investing in gold.

Yet, just a few weeks ago at the World Economic Forum, Soros made a comment about gold that shocked investors.

He said… “The ultimate asset bubble is gold.”

Now let me ask you a question.  If someone tells you something is in a bubble, isn’t your reaction to sell… to get out?  Tech stocks were in a bubble, the housing market was in a bubble.

According to Soros, gold is in a bubble.

Gold prices fell on the news.  Soros said it’s in a bubble… sell, sell, sell. And that’s what investors did.

But is Soros selling?  Nope.

He lied to you and he lied to me.

While Soros was saying gold’s in a bubble, his hedge fund was secretly buying up gold.  How much did he buy?  He more than doubled his ownership position.  So much for gold being in a bubble.

Soros has invested more than $600 million into gold funds.

It just goes to show you, once a trader, always a trader.  Soros has traded in his white hat for one of a darker shade.  Soros manipulated everyday investors so he could add a few million more dollars to the billions he already has.

Let me put it to you another way.  All the economic signs are pointing to higher gold prices.  If you don’t have some in your account, consider adding some soon.  Soros is.

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Category: Commodities

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The Dynamic Wealth Report works with a number of staff writers and guest experts who specialize in everything from penny stocks to ETFs to options trading. These guest analysts post under the 'staff writer' moniker for ease of use.

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