Einhorn gained fame from shorting Lehman Brothers prior to the financial crisis. He obviously has a deep understanding of the financial system. So why is Einhorn creating his own private version of Fort Knox?
It was recently reported that Einhorn has stored his gold in trust with HSBC, which maintains a gold vault in Manhattan under its Fifth Avenue office tower. As of March 30, this dedicated gold fund had raised about $556 million from 130 investors.
A person familiar with the hedge fund industry says a secured facility in Queens is where Einhorn’s Greenlight Capital stores some of the gold bullion it has invested in. An Einhorn spokesman declined to comment on the speculation about the location of the hedge fund’s so-called physical gold.
The bigger question is what would cause Einhorn to load up on physical gold bars? He obviously has to pay a storage fee as well as insurance expenses. He obviously has doubts about gold ETFs such as GLD and even PHYS.
However, Einhorn has simply stated that "gold represents money."
“To me gold represents money. There are different types of money – some people think gold is a commodity and they like to think about jewelry demand and how much is coming out of the ground and so forth – I think of gold as money. You can have dollars, or you can have yen or euros or pounds, or you can have gold. I think the merit of gold is that given our current monetary and fiscal policy [in the US] as well as the problems in the other major currencies, gold is the money of choice that we would like to have a meaningful amount of our assets denominated in.”