Paulson's favorite investment this year is gold

John Paulson, the wildly successful hedge fund investor once labeled by the media as “The Man Who Made Too Much,” has made a big public bet on gold. Paulson made a $20 billion fortune through the current financial crisis by betting against both banks and the housing market. He has decided to launch a hedge fund dedicated exclusively to gold bullion related investments, including mining shares. Paulson is personally investing between $200 and 250 million of his own wealth into the fund which opens on January 1 of next year.

To put Paulson’s investing prowess in perspective, we’d like to quote the Social Daily News (the photo is from them, too!). The dug up some information on Paulson’s 2007 earnings:

Hedge fund manager John Paulson raked in an astonishing $3 billion last year.

That’s more than $1.4 million an hour, assuming a 40-hour workweek with no vacations — though we expect he worked a lot more than that.

Meanwhile, the average American worker made just $17.86 an hour in March, according to the government’s Bureau of Labor Statistics.

It would take 80,756 average Americans to make the same amount of money as Paulson did.

Gold has been around for ages.  I’m not that old, but gold will tell a different story.  It’s been around since the beginning of time.

Why have investors begun to hoard this precious metal?

Why have households across America begun to increase the amount of their assets that normally go into stock and bond funds?

It’s easy.  Easy to do.  Easy to buy, easy to store, easy to sell.  It’s tangible.  It’s safe.  It’s everything the stock, currency and real estate markets are not and it’s getting easier and easier to make money with it.

Now and then the gold market sees a pullback.  Now is one of those times.  With gold up to almost $1,000 per ounce, investors are coming to buy and buy more gold in order to protect themselves from the coming financial disaster that is expected to wipe out more Americans as if the events of 911, the stock market collapse and currency crisis were not enough, this next batch, or should I say, inflation, should do the trick.  And when I say trick, I don’t mean a circus trick, I mean a financial disaster so extreme most won’t be able to rationalize it to themselves.

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