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Gold “Bargain of Lifetime” As Gold Standard Inevitable, Possibly Within Year - $10,000/oz Looms

GoldCore's picture





 

 

Support for gold is at $1,612/oz and resistance is at $1,663/oz and $1,684/oz.

Gold climbed on Thursday on concerns that the Fed could employ more QE in a further attempt to stimulate the economy. The Fed said that the economic conditions "are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014”.

Continuing ultra loose monetary policies and negative real interest rates continue to support gold.

The Fed has already engaged in 2 rounds of asset purchases near a massive $2.3 trillion, to drive down interest rates and in a vain attempt to stimulate the US economy. QE helped push up both equity and commodity prices by providing cheap money to investors who placed it in riskier assets.

Thus, QE is leading inflation pressures and there is a risk that the Fed, like other central banks, continues to underestimate the risk of inflation.

Bernanke said US monetary policy was "more or less in the right place" even though the central bank would not hesitate to launch another round of bond purchases if the economy were to falter. 

Investors will examine efforts by Europe to solve the debt crisis after ECB President Mario Draghi called for a "growth compact" but put the blame on euro zone governments to sort out their economies. 

The eurozone debt crisis is far from resolved and the next stage of the crisis could be even more volatile than the recent Greek saga.

Gold Standard Inevitable, Possibly Within Year -  $10,000/oz Looms
Reuters TV have interviewed John Butler who says a return to the gold standard is "inevitable" possibly as soon as within the year and $10,000/oz gold is on the cards.

Jamie McGeever interviews Butler in the Goldsmith Hall in London about his opinions propounded in his new book, ‘The Golden Revolution : How to Prepare for the Coming Gold Standard.’ 

Butler has 18 years’ experience in the global financial industry, having worked for European and US investment banks in London, New York and Germany.

The book says that the era of paper currency is coming to an end and a return to a gold backed dollar is basically inevitable. 

McGeever starts the interview by saying that far from gold being expensive at $2,000/oz, gold may be “the bargain of a life time” especially “if the world returns to some form of gold standard.” 

Butler says that this “could happen as early as next year” due to BRIC nations dissatisfaction with the dollar reserve standard, “they will start to move formally back to gold”. 

There are many ways that this can happen according to Butler including one country becoming a first mover, surprising the world and the United States, by pegging its currency to gold

He points out that Russia may be the country who could do precisely that.

This could lead to a run on the US dollar and financial assets and could see the dollar lose 20% in 24 hours as investors pour into real assets such as oil and gold. This could lead to a depression in the U.S.

There could be a Bretton Woods style “crisis meeting” where the U.S. decides it must reinstate the gold standard or else the dollar “may lose its reserve status entirely.”

Gold at $5,000/oz should happen and possibly over $10,000/oz in that scenario as gold will be a “de facto monetary asset in cross border balance of payments transactions”.

Reuters’ McGeever acknowledges how the “gold market is tiny” compared to “trillions and trillions of dollars worth of cash and assets sloshing around the world financial system.” He asks how can countries back “all of that” against such a “tiny and finite amount of gold?”

Butler responds by saying that “the amount of gold is finite by weight or volume, it is not finite by price.”

If gold is going to be remonetised it is entirely reasonable that “gold’s price will rise by an order of magnitude.” 

Butler correctly points out that if gold were to rise to over $10,000/oz then in fact what you would have is a market capitalisation of gold, as it were, vis-à-vis the money supply and credit volume generally which is in line with a longer term comparison – it implies stability.

It is another must watch video and shows how consciousness regarding the value of gold as a finite asset and currency is gradually shifting with obvious ramifications for all who wish to protect and grow their wealth in the coming years.  

Far from gold being a speculative bubble, as suggested by less informed economic experts and financial advisors, it may remain undervalued at below $2,000/oz and may be destined to reach much higher levels as gold reasserts itself as the global currency par excellence.

 


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Mon, 04/30/2012 - 16:42 | Link to Comment printmoremoney
printmoremoney's picture

Market Rule #1, things go up slower than they come down. The whole VaporCash Derivatives explosion is only 10 years old. It can evaporate in less than a year. That is how it works, suckers in long, then wack em, count the money, start over again. Bankster 101.    Enjoy the ride suckers! Only the Banksters get out first when FIRE is shouted in the Theatre. Everyone else is Well Done.

Sat, 04/28/2012 - 03:14 | Link to Comment TN Jed
TN Jed's picture

"Jamie McGeever interviews Butler in the Goldsmith Hall in London...."

 

This is incorrect.  Or rather not specific enough.  Listen to the very end of the interview.  Jamie McGeever says "Goldsmith Hall in The City of London."  That's a big difference from just London.  I'd say The City of London approves of this gold message and carries as much weight as the authors thoughts if not more.  That's the story.

Sat, 04/28/2012 - 00:22 | Link to Comment matrix2012
matrix2012's picture

 

 

The Deadliest Vicious Cycle We’ve Ever Seen

Martin D. Weiss Ph.D

 

My family and I have been tracking speculative bubbles and busts for 80 years.

We’ve personally witnessed 12 recessions, two depressions, five stock market crashes, three real estate busts, three bank failure epidemics, and two of the most vicious inflationary spirals of all time.

But nothing has prepared us for what we’re seeing now!

Just look how dramatically the world has changed since 2000:

• In prior years, we occasionally saw some individual countries — such as Germany in the 1920s and Brazil in the 1970s — run giant budget deficits and finance them with truckloads of paper money.

But until now, we had never seen a situation like today’s — EVERY MAJOR COUNTRY in the Western world doing it in unison!

• In prior years, sometimes the financial disasters were caused primarily by reckless behavior in government, and sometimes by reckless behavior among banks.

But until now, we had never seen BOTH MAJOR GOVERNMENTS AND MAJOR BANKS take such unprecedented risks at the same time!

I vividly remember how we first began this discussion many years ago …

On a bright summer day in the mid-1990s, my father and I were completing a major comparison of all the major 20th century booms and busts.

He pulled out his long-term charts on interest rates, which he had been updating by hand for decades, and pinned them to his wall. Together, we poured over another stack of charts on stocks, the dollar, and gold.

And we came to the conclusion that the new millennium could bring the most extreme bubble-and-bust cycle of all.

But if you could take a time machine back to that day and if you described to us what I’m about to document for you now, we would have responded with just two short words:

“You’re nuts!”

Never, even in our wildest imagination, could we have foreseen these basic facts, which are such a pivotal aspect of our financial markets today …

Fact #1. The world’s most powerful governments have printed more paper money in the last three years than in the prior half century!

Read that again and think about it carefully for a moment.

If just ONE government ran its money-printing presses 24/7, it would be dangerous enough.

But as I demonstrated here last week, we now have ALL FOUR of the most powerful central banks doing it all at once.

And this money printing is SO big — with the potential for such a dramatic impact on your financial life — I feel I MUST give you the details again:

...

Read the full article here: http://bit.ly/Ia3eXy

It's a BLATANTLY concise yet clear-cut article about what we're facing now... 

 

Thu, 04/26/2012 - 17:55 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

"trust" is for fools. Read up & make your own decisions.

Thu, 04/26/2012 - 17:13 | Link to Comment Totin
Totin's picture

I think most people are getting a little tired of these predictions. Gold at $10,000 by end of year. Silver at $5000. Nah. We'll never go back to a gold standard. The 21st century currency manipulators will prevent it.

Thu, 04/26/2012 - 16:45 | Link to Comment Hook Line and S...
Hook Line and Sphincter's picture

Gold should not be a concern to you if you have less than todays current nominal quantity of 5-10k USD to simply play with. If you have no productive skills, take your depreciating fiat and learn a trade that can't be commoditized, and will assist in keeping your stomach full and body safe.

Nobody here knows the future.

Estimations, probabilities, historical precedents are indeed the tools of a critical thinker. Forming an opinion is mandatory, creating a belief with an emotional attachment is not.

Gold bugs and anti-gold bugs are standing on the same tight rope.

Hook Line & Sphincter

( ! ) J

Thu, 04/26/2012 - 18:19 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

"Hook Line & Sphincter"

UPVOTE for tagline!

Thu, 04/26/2012 - 16:22 | Link to Comment The Swedish Chef
The Swedish Chef's picture

A guy selling a book to hopefull gold bugs...*yawn* Stack on but don´t mind the noise.

Thu, 04/26/2012 - 16:20 | Link to Comment Bagbalm
Bagbalm's picture

If their money becomes convertible to gold it will be for other sovereign nations and central banks. Not you peasant.

Thu, 04/26/2012 - 18:22 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

even today Vietnam has yet to make it illegal to buy homes in gold.

Gold is a better currency than paper in Vietnam.

Thu, 04/26/2012 - 16:01 | Link to Comment EBR MOD 0
EBR MOD 0's picture

stacking and do not care, but I will believe gold backed anything when I actually see it.

Thu, 04/26/2012 - 15:43 | Link to Comment q99x2
q99x2's picture

Dream on. Banksters are stealing the world left and right and you think your going to keep $10,000 per oz gold from them.

Ha!

Thu, 04/26/2012 - 15:51 | Link to Comment SheepDog-One
SheepDog-One's picture

Well you might be able to keep your gold from the banksters, bury it out in the desert under a boulder so they cant get it, but can you go out and cash in gold for $10,000 and/or trade it for $10,000? Highly doubtful. In a scenario where gold is '$10,000' it will be illegal barter for the peasants at best.

Thu, 04/26/2012 - 16:13 | Link to Comment HungrySeagull
HungrySeagull's picture

Illegal only if you are caught.

Hence the reason Education and IRS have been contracting with ATK for ammo and Remington for 870's

Thu, 04/26/2012 - 15:27 | Link to Comment Quinvarius
Quinvarius's picture

This history of America is one of going on and off the gold standard repeatedly.  It has happened a number of times.  There is no reason to think it won;t happen again.  Most likely it will happen when gold is way over priced vs the amount of paper dollars in circulation.  And it will be done to stop the dollar from going to zero.

Thu, 04/26/2012 - 15:41 | Link to Comment LasVegasDave
LasVegasDave's picture

For what its worth, recalibrating the POG based on the expansion of the money supply since the US went off the gold standard, a price north of $27,000 per ounce would bring us back to an actual gold backed US Dollar.

Thu, 04/26/2012 - 14:52 | Link to Comment aerial view
aerial view's picture

After witnessing what our godernment can do with the Constitution, the TBTF bank bailouts, interest rates, money supply (QE) and the price of oil, manipulating gold is child's play for them: it can be restricted, made illegal, have huge price swings and scare enough people that they just don't want to mess with it. The focus needs to be on dealing with masters while we still can afford food and shelter.

Thu, 04/26/2012 - 14:49 | Link to Comment SheepDog-One
SheepDog-One's picture

How can gold be a bargain of a lifetime now when it was $350 only a few years ago? Im sorry, but people should have seen the writing on the wall way back then and bought.

'Gold standard innevitable'? Yea I think you can dream on about that one.

Thu, 04/26/2012 - 15:18 | Link to Comment Red Heeler
Red Heeler's picture

"How can a $1000 seat in a lifeboat be the bargain of a lifetime now when I could buy one for only $2 when this ship left port?" - SS Titanic passenger overheard moments after collision with iceberg

Thu, 04/26/2012 - 15:53 | Link to Comment SheepDog-One
SheepDog-One's picture

Exactly my point....now youre on a sinking Titanic and buying a life vest for $1,000 when you should have bought one for $10 before you got on the boat. I guess it will make the drowning passengers feel better if theyre told its the opportunity of a lifetime buy....and for them I guess it is.

My point above is crystal clear and totaly true, to call gold right now at $1,600 'the bargain of a lifetime' simply isnt....I was alive and buying gold at $350, in my lifetime, just a few years ago.

Thu, 04/26/2012 - 16:25 | Link to Comment Red Heeler
Red Heeler's picture

"How can gold be a bargain of a lifetime now when it was $350 only a few years ago? Im sorry, but people should have seen the writing on the wall way back then and bought."

"Exactly my point....now youre on a sinking Titanic and buying a life vest for $1,000 when you should have bought one for $10 before you got on the boat."

What are you, the world's greatest second-guesser or the world's greatest hair-splitter?

So maybe the article should be entitled: "Gold is Still a Great Bargain."

Thu, 04/26/2012 - 17:14 | Link to Comment Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

He's Schrodinger's sheep-dog

Thu, 04/26/2012 - 16:48 | Link to Comment Hook Line and S...
Hook Line and Sphincter's picture

Am I smelling powerlessness?

Hook Line & Sphincter

( ! ) J

Thu, 04/26/2012 - 17:09 | Link to Comment Red Heeler
Red Heeler's picture

Depends on where you're putting your nose.

Thu, 04/26/2012 - 16:11 | Link to Comment HungrySeagull
HungrySeagull's picture

I am pretty sure you hang on to it.

Never sell.

Thu, 04/26/2012 - 14:30 | Link to Comment MrBoompi
MrBoompi's picture

God every time I see a post saying "Gold to $10,000" I should sell every ounce I own immediately and buy it back when it hits $1200.

Thu, 04/26/2012 - 18:27 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

It's never going back to 1200. Worst-case scenario if USD doesn't cease to be a currency then the low-price for gold will be 2500. If it happens as Jim Rickards descibes then 5000 / oz will be the low price.

Thu, 04/26/2012 - 15:12 | Link to Comment hungrydweller
hungrydweller's picture

Exactly.  Once some numbskull announces that something is going to happen "within" the year, feel free to place a large bet that it will NOT happen in the next year.  That said, $10,000/oz in my lifetime just might happen.

Thu, 04/26/2012 - 18:26 | Link to Comment MeelionDollerBogus
Thu, 04/26/2012 - 14:07 | Link to Comment Tao 4 the Show
Tao 4 the Show's picture

I am not sure why that guy comes across like an infomercial, but there are so many holes in his argument that they probably put him on Reuters to discredit the whole area. Some simple number crunching is a good start. Most countries do not have enough gold to cover their money stock without valuing it at some astronomical number. Further, the entire ability to manipulate, bail out, hide transactions, multiply money supply, invent unbacked derivatives, etc, etc, etc would be instantly lost. We are near the speed of light on the dishonesty scale. Are we going to drop to zero velocity (honesty) instantly? I think this guy is enormously naive or disingenuous.

Thu, 04/26/2012 - 15:27 | Link to Comment shuckster
shuckster's picture

Indeed and thank you for being the voice of reason. I understand the monetary system is doomed, no one is denying that. But I think inflation is WAY overblown. Boomers are paranoid about it because they experienced it in 1970. But for inflation to occur, people must not be expecting it. As they say, the things you prepare for most rarely happen. If people get caught up in the fear and terror of the "economic collapse" and the gold frenzy, they are probably not going to make the best decisions. I try to remain logical. For instance, notice how food prices have shot up, but other areas have collapsed. What does that say? To me, it says, oportunistic food companies are seizing on the opportunity to jack up prices while people are hungry, therefore raking in more profit. Since it's a free market, they can do this. However, all these people see their food prices doubling, and they suddenly think that inflation is out of control. However, if you look at many companies, they are dramatically reducing prices, staff and cutting costs at every opportunity. That translates to dramatic deflation. Zimbabwe? Who cares about Zimbabwe? The Weimar Republic was run by a bunch of idiots anyways. Germany was a small country with nothing to lose by crashing its currency. America faces total anilhilation if its economy collapses - therefore, people are not going to be simply allowed to run for the exits in order to save their tales. They will be told to go back to their jobs, whether they like it or not. And if I know anything about people, it's that they are scared to stand up to authority and will be crushed. All the dissenters will be crushed. Do not underestimate our government. The idea of a bumbling stupid government is a facade - our government is very effective when it wants to be

Fri, 04/27/2012 - 02:07 | Link to Comment matrix2012
matrix2012's picture

yup, a very effective gubmint to pile up debt...

and i won't underestimate them until the situation is deteriorating so badly to the level of chaotic inside... until then the herds should be fine.

Thu, 04/26/2012 - 13:59 | Link to Comment lemonobrien
lemonobrien's picture

well, if the us is back against the wall, they'll fight, not give into a new standard which eliminates their advantage.

Thu, 04/26/2012 - 13:58 | Link to Comment They_Live
They_Live's picture

But it only costs $5 an ounce to mine from the asteroid belt. 

Or was that silver?

Thu, 04/26/2012 - 14:13 | Link to Comment FeralSerf
FeralSerf's picture

I think it was unobtainium.

Fri, 04/27/2012 - 02:02 | Link to Comment matrix2012
matrix2012's picture

unobtainium ==> WOW! a brandnew element in the universe...just found by NASA :D

Thu, 04/26/2012 - 13:36 | Link to Comment SAT 800
SAT 800's picture

Very interesting post; contains useful material.

Thu, 04/26/2012 - 13:28 | Link to Comment crawldaddy
crawldaddy's picture

there will be ww3 before a gold standard was allowed to be adopted by an country that counts.  If gold was going to be 10k by the end of the year ( what a stupid stupid statement) then we would all be better off buying food.

Thu, 04/26/2012 - 16:10 | Link to Comment HungrySeagull
HungrySeagull's picture

Food has been purchased. It's next year's hunt by the masses which your survival will be determined by your markmanship.

Thu, 04/26/2012 - 13:19 | Link to Comment chockl
chockl's picture

A lot of snivaling gov'nt sucking morons on this board.

Thu, 04/26/2012 - 13:25 | Link to Comment tempo
tempo's picture

Gold is just a commodity. Compare it to corn which doubled in 2011 and now has declined. If the deflationary pressures grow, gold will fall like a rock. With a worldwide labor glut and good hard working people will to work like slaves for $1.25/hr (Foxconn), wages and std of living will decline in the West regardless of deficit spending and deflationary pressures will grow. All assets will slowly decline in value regardless of how much money is printed.

Thu, 04/26/2012 - 18:30 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

Survival is just a commodity. Based on other commodities.

Surprise - the most important things in life are commodities.

Thu, 04/26/2012 - 15:37 | Link to Comment shuckster
shuckster's picture

Exactly, tempo! People will consume less. Companies that sell to "consumers" will be absolutely put out of business. TV? Probably will survive. Pet rocks? Not so much. 99% of stuff out there is useless junk with no other purpose than vice. Our generation (the Aborted Generation as I like to call em) won't be fooled by consumerist advertising. We were raised on easy mac, cool aid and saturday morning cartoons. We know how much  corporations care about our well being. I don't know about you, but I will vote to destroy every corporation in America that does not provide a necessary service. In fact, I think we should establish a white list - only those ON the list should be allowed to do business in the US. Those scummy companies who have burned too many people will be the first to get nixed and will get to watch their beloved CEOs hanging from the rafters. Viva revolution baby

Thu, 04/26/2012 - 14:02 | Link to Comment Clowns on Acid
Clowns on Acid's picture

tempo _ speed up your tempo and research biflation. The come back and post with an informed opinion.

Thu, 04/26/2012 - 13:18 | Link to Comment NewWorldOrange
NewWorldOrange's picture

I hope like hell a there is a return to a gold standard in the U.S. (though it would likely be more like the gold exchange standard like after WWI). But I suspect the miscreants will do something STUPID like subordinate the dollar and the other majors to SDRs. The best predictor of future behavior is past behavior. More likely that we'll see a gold-backed currency come out of Asia, so regardless, stock up on physical gold (and don't tell ANYONE you have it, and get it in as small denominations as you can. The only change you're likely to get from a purchase with a $40,000 gold coin will be in LEAD.)

Thu, 04/26/2012 - 13:05 | Link to Comment vegas
vegas's picture

Your lips to God's ears. I have a buy stop in at $5,000 just to make sure I'm not sleeping when it happens.

 

http://vegasxau.blogspot.com

Thu, 04/26/2012 - 13:26 | Link to Comment NewWorldOrange
NewWorldOrange's picture

That wouldn't be a stop, it would be a limit (not to be petty, but just in case you were able to actually place a stop at a higher price on a long trade - unlikely but you may want to check it.) Rest assured, however, that if gold is propelled that high or higher while you're sleeping, it'll be done by TPTB and along with that they'll issue a gold confiscation scheme that only gives you a much smaller amount for that gold position. PHYSICAL gold is the only sensible strategy if you're holding as a hedge against economic/dollar collapse. When that happens, if you are invested in gold only on paper, you're about as likely to be paid as a MF Global customer.

Thu, 04/26/2012 - 13:53 | Link to Comment vegas
vegas's picture

Yes, you can place a buy stop above the market to get long. Trade much?

 

http://vegasxau.blogspot.com

Thu, 04/26/2012 - 15:11 | Link to Comment NewWorldOrange
NewWorldOrange's picture

LOL Yeah, trade for a living. And I'm that guy who admits when he made an error. Reading too fast and didn't see the "buy" or something. Brain fart.

That said, I still think that holding paper gold in anticipation of skyrocketing gold prices is a bad idea, BUT if you just do so with a very small percentage of your portfolio in hopes of a bigger. leveraged gain JUST IN CASE you might actually not get Corzine holed on the paper when most all paper has become near worthless. I'm guessing you fully understand that.

Thu, 04/26/2012 - 16:50 | Link to Comment vegas
vegas's picture

NWO,

Yea, it made me LOL also, that's why I said that. Unless there is a revolution somewhere that matters [sorry Greece], and the Ponzied elites have already been dealt with, the paper system might be gone as we know it. Hopefully, the Crimex will have been replaced by the time the order is filled.

 

http://vegasxau.blogspot.com

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