- Jeff Ostrowski Palm Beach Post Staff Writer
Former Wall Street economist Henry Kaufman won’t be loading up on Bitcoin.
“I would rather buy tulips,” said Kaufman, referring to the speculative bubble in precious flowers that swept the Netherlands in the 1630s. “It is not a medium of exchange. It is not a store of value.”
Kaufman is no gold bug, either, he told an audience of about 200 during an appearance at The Society of the Four Arts on Monday. While gold is favored by those who distrust the government and the financial system, Kaufman doesn’t count himself as part of the end-days crowd.
Kaufman, 90, lives in Palm Beach now, but he was born in Germany. He moved to the U.S. at age 10 to escape the Holocaust, and he says immigrating made him appreciate his adopted home country more than native-born Americans can.
“This is the place to be,” Kaufman said. “Gold is voting against your country, and I cannot vote against the United States.”
It was a surprisingly sunny statement from an economist once known as Dr. Doom. During the stagflation of the 1970s, Kaufman routinely issued bearish forecasts while he was a partner at Salomon Brothers.
There was good reason to be pessimistic then. Kaufman is far more bullish now.
For instance, he’s sanguine about Washington’s hefty debt load, a figure that’s expected to balloon as a result of the federal tax cuts that take effect this year.
“In order to have economic expansion in a society, you have to increase outstanding credit, one way or other,” Kaufman said.
However, he’s concerned about the concentration of financial assets in the hands of just a few banks. Kaufman said the 10 largest financial institutions hold 80 percent of assets.
Kaufman’s presentation was moderated by David Breneman, president of Four Arts and a former economics professor at the University of Virginia. After the discussion, Kaufman signed copies of his latest book, Tectonic Shifts in Financial Markets.