Big Short John Paulson Says Gold Prices Are About To Go Parabolic, Says Cryptocurrency Is A Bubble

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John Paulson made his name betting against the housing market during the great recession while everyone else was bullish. Now He has a much more contrarian view and believes gold prices are set to go parabolic. according to his recent interview with Bloomberg's David Rubinstein, the billionaire has returned all outside capital:
"...now I don’t have to write investor reports or travel to meet with investors or worry about balancing funds or other people’s tax issues and things like that. So that’s allowed me just to concentrate on investing, which I like doing."
But although his track record has been mixed since the 'big short', and he has not found the next "big trade", Paulson is again seeing the warning signs of excess speculation, warning about SPACs and seeing the most mispriced assets in credit once again.
They look for get-rich-quick schemes and they buy based on stories. And then they chase investments that are going up, and ultimately those investments deflate. And then they lose money.
During the early 2010s, Paulson became better known as a gold bug, and remains convinced of its potential:
Yeah, we do. We believe that gold does very well in times of inflation. The last time gold went parabolic was in the 1970s, when we had two years of double-digit inflation.
The reason why gold goes parabolic is that basically there’s a very limited amount of investable gold. It’s on the order of several trillion dollars, while the total amount of financial assets is closer to $200 trillion. So as inflation picks up, people try and get out of fixed income. They try and get out of cash. And the logical place to go is gold. But because the amount of money trying to move out of cash and fixed income dwarfs the amount of investable gold, the supply and demand imbalance causes gold to rise.
So you’re a big believer in gold as a good investment now?
Yes. We thought in 2009 with the Fed doing quantitative easing, which is essentially printing money, it would lead to inflation. But what happened was while the Fed printed money, at the same time they raised the capital and reserve requirements in banks.
So the money sort of recycled. The Fed bought Treasuries, created money, which wound up in the banks and then was redeposited at the Fed. And the money never really entered the money supply. So it wasn’t inflationary. However, this time it has entered the money supply. The money supply was up about 25% last year and the best indicator of inflation is money supply. So I think we have inflation coming well in excess of what the current expectations are.