Big news for gold this week!
The $16 billion Ohio Police & Fire Pension Fund approved a 5% allocation to gold to help diversify its portfolio and hedge against the risk of inflation.
The change was approved as the first step in an ongoing asset review that was presented to the board on Aug. 26, the fund said in a statement.
Why do I consider this big news?
Pension funds have a fiduciary responsibility to the people vested in the plan. The pension fund has to provide a pension for workers retirements. To do this they typically match the benefits that they will need to be paid with the returns on the fund’s investments.
Most of the time these funds try and hold as low risk investments as possible. In the past this has meant long term government bonds.
With governments and central banks around the world engaged in interest suppression the ability to match benefits with assets cannot be done with bonds.
Furthermore, as the central banks continue to debase their currencies price inflation in goods and services is inevitable. The fund is taking a step towards hedging itself from what it sees as government and central bank irresponsibility.
This is a big step because if more pension funds and insurance companies and other entities that provide long term benefits move into gold we could see further moves higher in the gold price.
My weekly video goes into more depth on this news long with more companies putting excess cash into bitcoin.
Is the move into hard assets beginning? Yes, I think so.
To your investing success,
John Polomny