Wednesday, March 9, 2011

Pension Funds And Gold

Interesting graph below which shows the percentage of gold holdings in global pension funds.  Pension funds are monsters in the financial community with a total value of about $31.1 trillion. 

This is money that comes in and is invested to pay future retirement payments for current employees. The percentage of this $31.1 trillion invested in gold related assets is .30%.  The rest is in traditional assets such as stocks, bonds, and real estate.



The question of course is what happens if just a tiny fraction of these funds decides to move into precious metals?

The question applies for insurance companies who are $18.7 trillion in size.  They also focus their investments in stocks, bonds, and real estate.

It is not even worth thinking about what would happen if some of these funds moved into silver, which is only a fraction of the size of the gold market.  The entire available above ground silver, about 1 billion ounces, is only worth $35 billion total.

For more silver thoughts, I would listen to recent interviews and presentations from billionaire and money money Eric Sprott:

Sprott On Silver

Investment Of The Decade

h/t Casey Research

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