"What we really own gold for is just in case something goes really haywire"
Gold might be down this year, but it's still an important component of Greenlight Capital founder David Einhorn's portfolio. Why? Because of reckless monetary policy from theFederal Reserve, the billionaire tells CNBC in a new interview.Asked by the talking head whether gold's performance has been a disappointment, he replied: "I don't know that I would agree with the premise about it not working out the way we thought it would. We bought the gold in 2008 when we saw what was going on with the Fed policy.
"This year hasn't been a good year for gold, but other years have been good, and the investment overall so far has been OK for us. But that's not the important thing, because what we really own gold for is just in case something goes really, really haywire. And what I'm thinking about is in terms of mostly the monetary policies but also the fiscal policies that are being run by the big economies. I just heard (Starwood Capital) Barry Sternlicht (speak on CNBC) and he was very critical of quantitative easing and the easing policy. I think I'm much more critical than he is. ... I don't think it's a question of the price of gold; I think it's a question of the wisdom of the policy. And I think it makes sense. It's not like half our portfolio is in gold or anything like that, but I think it makes sense in any portfolio to own some of this. It's very under-owned and it makes sense in case these guys kind of lose control of the switches."
In the same interview at the Robin Hood Investors Conference, he also expounded on the Fed: "I'm not convinced when -- or if -- they'll ever taper," he said. "I don't know. We may go into the next crisis, the next depression/recession rollover, and the next move might be to pour more fuel on the fire. It wouldn't surprise me in the slightest."
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