BlackRock CEO Larry Fink says investors pile into gold, crypto as global debt risks rise
Fink calls gold and crypto “assets of fear” amid debasement concerns
[RIYADH] BlackRock’s chief executive officer Larry Fink said investors are flocking to alternative assets like precious metals and cryptocurrencies as they’ve grown increasingly worried about the growing piles of government debt around the world.
“Owning crypto assets or gold are assets of fear,” Fink said at the Future Investment Initiative in Riyadh. “You own these assets because you’re frightened of the debasement of your assets. You’re worried about your financial security. You’re worried about your physical security.”
Fink’s comments come amid growing momentum for the so-called debasement trade, which has investors selling government debt, as well as currencies like the US dollar, yen and euro and hoovering up gold, silver and crypto.
The term debasement is a reference to when rulers such as King Henry VIII and Nero diluted or debased their gold and silver coins with cheaper metals such as copper.
Even so, Fink said the US has remained the primary destination for investments despite some outflows from “overweighted US assets” earlier in the year. And, he added, most global investors think the US is “going to be the place to have your overweight position for the next 18 months.
Fink appeared on a panel at FII alongside a slew of other Wall Street heavyweights including Goldman Sachs Group’s David Solomon and JPMorgan Chase’s Jamie Dimon. While Dimon singled out growing government deficits around the world as his key concern, Fink said his biggest worry is US dependency on selling its US dollar asset to international investors.
SEE ALSO
“We still are a nation that needs 30 per cent to 35 per cent of all our Treasury sales going overseas, and, to me, that’s the biggest issue today,” Fink said. “We’re lucky that people would like to invest in US dollars, invest in the US economy. If that ever changed, it has a multiplier effect because of the dependency on selling US dollar-based assets to foreigners.”
Pershing Square Holdings’ Bill Ackman, meanwhile, said the key to avoiding any future issues will be focusing on growth of assets. Fink noted that further unlocking private capital could help boost US economic growth to 3 per cent.
“I’m not worried about our solvency, although I’d like to see slower growth in our liabilities,” Ackman said. BLOOMBERG
Share with us your feedback on BT's products and services
