From the May 01, 2011 issue of Futures Magazine • Subscribe!

Henry Jarecki: Jarecki’s law



Henry Jarecki has taken several career paths and has excelled in each. While already a distinguished psychiatrist and Yale professor, he became involved in the cash metals business, even taking over leadership of the 300-year old London bullion house Mocatta & Goldsmid. As head of Mocatta he helped stabilize the silver market following the Hunt brothers’ ill-fated corner attempt in 1980. He applied the windfall he received from liquidating his stake in Mocatta to create a passive long-only commodity strategy before there was such a thing as the Goldman Sachs Commodity Index. He founded Gresham Investment Management where he deploys his Tangible Asset Program (TAP). As TAP continued to outperform other investible indexes, he offered it as a fund through Gresham. Jarecki has started numerous successful businesses, produced movies, is on the staff of Yale and is involved in numerous board and charitable foundations. We spoke with Jarecki on his career in metals.

Futures Magazine: Dr. Jarecki, you already had established a career in medicine and academia when you became involved with the Mocatta Metals Group and helped form its U.S. affiliate. What drew you to this?

Henry Jarecki: My family was involved in medicine and academic medicine on my father’s side and on my mother’s side was involved in commerce and merchant shipping and trading. So after some time in the practice of medicine and becoming a professor of psychiatry at Yale, I got interested in trading businesses at the beginning of [a period of increased] public interest in silver and gold. There were arbitrage opportunities between the British market and the American market, and there were different forms of silver available that had different values among them. The silver certificates, which were American bank notes backed by silver, [were one]. There were opportunities in buying one kind of silver and selling another in a different market.

FM: Did you have an inkling that the dollar peg to gold would end?

HJ: If you think about commerce, you get to thinking about inflation. I was German born so it was natural for me to have known through my family about the German inflation that was pretty dramatic. So you think, ‘Are there government solutions to the problems of inflation?’ Problems of inflation had just come up in the period since paper money was issued and became more the way of buying and selling things. Before that, metals themselves were money and [then] surrogates for that metal money emerged and during that time inflation had become more common.

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