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July 2, 2010

In 2007, billionaire hedge fund manager John Paulson earned over $10 million a day, more than the earnings of J. K. Rowling, Oprah Winfrey and Tiger Woods put together. He is famous for his negative view of the US housing market and for making a fortune betting against the subprime mortgage market.

Its therefore notable that he told a captive audience at the London Schoool of Economics that now is the best time ever to buy a house in the United States. He also said the risk of a double-dip recession in the US is less than 10 percent.

Paulson pointed to California as a leading indicator of where the US housing market is headed.

“And it turned positive seven months ago,” Paulson told the group. “I think we’re about to turn a corner.”

Paulson is also optimistic about the US economy. He said he thinks the US is at the tail end of the credit crisis, which has crippled home buying.

He is concerned, however, with high rates of inflation as well as Europe’s economic future. “Within three-to-five years, we could see high single, if not double-digit rates of inflation,” he said. About Europe, he said its the “one soft spot in the world.”

His current investments underscore his prediction of high inflation, he’s stocking up on gold. Paulson’s firm is the largest holder of Gold exchange-traded funds in the world.

John Paulson is now the subject of writer Gregory Zuckerman’s book “The Greatest Trade Ever: How John Paulson Bet Against the Markets and Made $20 Billion.” The role he played in the U.S. housing market meltdown is hotly disputed. Some have labeled him as an ‘enabler’ of the worst financial crisis since the Great Depression.

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