Donald Trump’s newest tenant on 40 Wall Street, his 70-storey luxury skyscraper in New York will be giving him gold as a security deposit instead of cash. Situated in Manhattan’s Financial District, the deposit for this commercial lease is worth $176,000. But no money will change hands. (article on WSJ)
The new tenant is precious metals dealer Apmex and it souds like their CEO, Mr. Haynes, took the opportunity to create some fine exposure. The Donald too, as he never misses out on such occasions.
“Gold has been a valuable asset class for the last 10,000 years, but the world has drifted away from it,” Mr. Haynes says. “I figured, Trump is a smart guy, and he’ll realize that taking gold is a better idea than taking cash.”
So, it wasn’t Trumps idea, then? However. Trump takes the opportunity to criticise president Obama’s economic policy:
“It’s a sad day when a large property owner starts accepting gold instead of the dollar. The economy is bad, and Obama’s not protecting the dollar at all….”
That may be true. But then again: self-promotor Donald Trump has a reputation of dancing when the music stops. So, for many analysts and financial journalist, Trump accepting gold over dollars is like your taxi driver advising you to buy stocks: it calls the peak. (read Brett Arends views)
News that Trump is backing gold comes after the metal has already skyrocketed in price. Gold has so far jumped nearly 30% so far this year, and more than 500% in a decade.
On a closing note: the gold in this transaction is just the security deposit. I reckon the tenant will pay the rent in dollars.