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Gold “Bargain of Lifetime” As Gold Standard Inevitable, Possibly Within Year - $10,000/oz Looms
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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"8000 tons of tungsten sitting in Ft Knox is not enough." - There fixed it for you.
Thank you.
I don't know why I bother pointing out Ft Knox after the NY Fed keeps the stuff 100 feet under the street.
The so called mercintalist nations don't hold dollars, they hold treasuries. The US will simply default on them.
That is the largest road block to a gold standard in any fiat-indebted nation.
if the us defaulted, it would trigger hundreds of trillion in credit defaults.
Think they would get payed? LOL
I'm assuming we'd have to default on all debt obligations to go to a gold standard. Or near default (50:1). As the British learned, you can't trade with mercantilists. They will always desire the gold over anything else. Perhaps a gold standard but with a "trade currency" that couldn't be hoarded for gold.
Correct. Same can be said of any nation that manipulates their paper fiat. precisely why I say that china does not really want the reserve currency or to have a gold backed yuan. Less the next ton of soybeans we ship them will have to be paid for with gold, although I might also consider selling for some diesel as well.
2012 apr 25 gold 277 week ROC | goldpricemodel
2012 apr 17 gold ROC trends | goldpricemodel
gold price models upside & downside 2012 Jan 27
awesome, got a junked -1 without even a question as to why? The chart shows more than a year of gold price fitting the brackets I set for every day. Do the math yourself, today's price divided by 277 weeks ago, you'll get the same result.
Can i really trust an article about gold writted by "GoldCore" not to be biased for the inflation of the price?
I didn't think so either.
Can you trust Goldcore? It's a tough question that really has me sweating.
Well my answer to that is, can you trust Bernanke, Obama, Romney, Blankfein, Dimon, Corzine and all those other wonderful people who gave us unlimited debt, non-stop war, unemployment etc?
When it comes to stopping the currency from blowing up, yes, maybe you can trust them. Who has more fiats to lose?
This whole concept of "trusting" authors, and wanting to know their affiliation; is very modern. At one time, educated people knew how to think and analysize written material; now we have the great move to Female Logic, "but how does it 'feel'". Do your homework, get out the original references, study the history of Fiat Currencies and the present situation in the world, which is un-precedented. Ultimately, what you want to trust is the work product of your own mind; but you wish to avoid both the work necessary to train and educate your mind, and the responsibility for arriving at conclusions; instead you prefer to search for "just the right guru", who will tell you just what you wanted to believe, but without belonging to a suspiciously named organization! Good luck, you're going to need it.
Rather than trusting or not trusting the author, why don't you examine the arguments themselves, and judge them based on their own merits?
Yeah, the arguments are there, but the counter arguments are not. While I don't dispute the main thesis of the article, Gold at $10000 within the year, points to a major dislocation of the monetary system. We will be in a state of Total War long before that happens. Money and Gold will be the least of your concerns in that scenario. Radiation poisoning should be at the top of your list.
Most people alive today have not heard of or read about the Cold War, Nuclear weapons and other considerations.
Unfortunately they are going to be the first to die. Just don't be inside a current Federally Mandated No go Zone after a nuclear strike of any size. You are on your own.
Even though I'm long term bullish on gold, you instantly lose credibility when making statements such as $10,000 an oz looms.
You mean like when Jim Sinclair said $1,650/oz 10 years ago?
BAZINGA!
Instead of mindlessy going around plugging gold to friends and family so that you have company in your misery, maybe you should give it a rest. If it is painful to pay $1700 for an ounce of gold, then it is probably over priced. These gold dealers still ask to be paid in cash, if that's any indicator of where their true values are... find me a gold dealer who pay his employees in gold and I'll think about buying from. Scumbags all. They'll get what's coming to them
it's painful to pay for higher food and gas prices but YOU WILL pay them and it's only going higher.
Last I checked they buy back in cash too.
Have you noticed that gold is always priced just above the pain threshold for the layman? An ounce is always just a little more than most people can afford to save in one tranche. It's always just enough to make people say $?? for THAT? This is just what the market automatically does - it's the equilibrium that gold always seeks.
I don't know anyone who poo-poos gold at $1700 that wasn't also poo-pooing it at $400 in favor of tech stocks or real estate. For the majority of people it will just never make sense to speculate in hard assets, ever.
That is because hard ASSETS can be taken away! Homes can be reposessed, gold can be taxed or outlawed - if you are going to make money, make money. But don't cash out your kids' college fund on gold speculation. What happened in 1985? A huge gold crunch. The price shot up vertically. What happened next? It tanked, because the market had been cornered. If you want to know how much gold is actually worth, go to Saudi Arabia or Mexico where it is used in transactions. Do not believe the hype here in the states. $1700 American can buy you much more in one of those countries than 1 ounce of gold. The dollar will recover - Bernanke has already said that he won't do QE until the market breaks down. In other words, he is saying he is waiting for a crash. Once the crash comes, I have no opinion on what he will do. However, a crash will come and there will be a scramble for more dollars in the meantime. People will try to liquidate their assets in order to survive, but it will be too late. There will be a HUGE housing glut. Tech and consumer products will be shunned. Don't be a baby, take your winnings while your ahead! Do yourself a favor... don't speculate with your life savings though...
Dont bother reading or responding to above.
WE remember going poo poo when Gold hit 250- then 400.00
That was three decades ago. Shite, we should have bought all in if we knew now what we should have known back then.
It matters not. Stack your silver, and stack your gold.
There will be a day a-coming when paper burns inferno and those in metal will have something to do afterwards.
I've posted this before but it is an example of gold not performing very well for a period of 28 consecutive years.
How come it is ALWAYS overlooked that the poor sucker who bought gold on 21st January 1980 had to wait almost 28 YEARS to see their asset once again reach what they paid for it?
"The previous all-time record high gold price in US dollars, reached on 21st January 1980, fixing at $850.00 on that day's p.m. London fix, was finally topped on January 3rd 2008.
note: gold FAILED to preserve some peoples wealth for 28 years. see that word...
FAILED FAILED FAILED
1 day vs decades? 1 decade vs 2 more? Ignoring the ability to short?
You, sir, suffer from Fail.
Smiler03, you have repeatedly made that same disingenuous and HIGHLY selective argument in the past, and it remains just as irrelevant and specious as the first time you made it.
You ask, what about somebody who bought an asset at its VERY PEAK, and held it until its very bottom? Well, one can point to ANY asset and give examples of precisely the same effect --- so fucking what? You are chosing an extreme, and extremely limited, scenario to make a general case, which is as complete a failure of logic as I have ever seen.
If and when the gold bubble pops, do you think that will be the final nail in the coffin for Wall Street? It may just be. All these people who are so irratable about gold will be up in arms when it goes to $200 an ounce and the blame will obviously fall on Wall Street. As a side note - a close friend bought into the Housing Bubble hype a while back and he wanted me to join him in the chaos. I passed, knowing that no truly good business opportunity is written about in "Real Estate Investing for Dummies". The same guy who sold him his home (which was foreclosed on last year, sadly) is now going around selling gold. See a pattern here folks? They recruit lowlifes to prey on Baby Boomers who are experiencing an identity crisis in their old age (as well as their parents). Older people are very trusting. Us young folks can smell a lie from a mile away. Bill Clinton didn't bang Lewinski? I knew that shit was a lie the moment I heard him say it, long before he admitted it. And I was only 8 or 9 at the time. Then came 9/11. At 15 years old, I said out loud "why did they demolition the building?". I couldn't understand at the time way they would want to do that so I forgot about the whole thing. Anyways, the point is, you have to be able to smell a scam. Judge the people who are plugging it. Trust absolutely no one who comes to you with a "business idea". Business ideas don't come to you, you have to find them. That's why I will probably be getting out of the stock market for good. Lost $50,000 in the past 3 years playing VXX call options. Sure, I made some bad decisions, but my final conclusion wasn't that my judgement was off - it was that the market was being gamed and that the indices weren't reflecting reality. Bernnie Madoff ran the NASDAQ before he was thrown in jail. Who is running it now? And are the NASDAQ and DOW lying? Are they the next S&P's? No thank you sir. Fool me once. There is no way to make money in the market, no matter how smart. If you are a retail investor, you are being played like a cheap violin. This is why Israel must die. Sorry for partying
Are you currently taking Xanax, or lithium?
No matter --- neither one appears to be working.
.
Thorazine may be indicated here. If that isn't effective, he could try Haldol (haloperidol), perhaps in combination with Artane (trihexyphenidyl).
"If it feels painful to pay $1700/oz, then it's probably over priced"---a magnificent example of Female Logic. It's amazing, really, you can analysize a very complex subject reflecting the even more complex organization and status of the world financial situation just by how you "feel". I guess I wasted 8,000 hours educating myself with books; apparently I could of just notice how I "felt" about the price. Some day you're going to look in the mirror and realize you just met a Moron; I hope it isn't too much of shock.
Jeezus, you'd think I'd called Jesus a queer in the middle of church sermon judging by these responses. Apparently I've touched on a a touchy subject. Just trying to create dialogue and get a better understanding of the market - not trying to insult anyone's intelligence...
Back peddle much?
@ Shuckster
If you really have been here for the 12 weeks that your biography shows then I'm surprised you haven't learnt yet that it is unspeakable on ZH to say anything whatsoever against gold.
Gold is perfection, it knows no wrongs.
Get with the flock or thou shalt be reviled!
Funny that people lampoon AAPL's stratospheric price and yet buy into the idea that gold is god. Must be conflicting ideologies or something
Funny that people lampoon AAPL's stratospheric price and yet buy into the idea that gold is god. Must be conflicting ideologies or something
Funny that blinkered, ignorant, conformist, conventionalist, gold-hating sheeple trolls such as yourself can never see the exploding money supply, and the exponentially-rising US federal deficit and debt, as examples of the ultimate in financial bubbles (and insanity) which are eroding the fiat-demoninated values of their investments and savings as we speak, and guarantee a severe decline in those fiat-denominated values down the road.
Tell us, Oh Ignorant One (you are in your 20s, am I right?), just exactly at what point during the Weimar Germany hyperinflation, or the collapse of the Russian ruble in the 1990s, or during ANY of the almost innumerable Latin American currency crises of the 1960s, 1970, 1980s or 1990s, did gold crash, in the local (and dying) fiat currency terms, from what you would undoubtedly and similarly have called a "bubble"?
You confuse the symptoms for the disease.
When you can free yourself from thinking in purely nominal (and ever depreciating) fiat currency units, you may begin to understand some of the topics discussed here. Until then, please continue throwing (paper) turds into the punchbowl.
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So you want gold dealers, who are BY LAW forced into the corrupt fiat monetary system, to sell their gold for .... gold?
That is some uniquely circular non-logic that you display there.
You aren't by chance the official spokesman of a Montreal-based (putative) precious metals dealer, are you? Or perhaps a member of the Cass Sunstein online brigade?
A corrupt monetary system maybe - but cash is still a much better method of conducting transactions than gold. It's highly liquid, there are no restrictions on its use. You can't buy stuff online with gold - you have to turn it into cash first, which generally entails a transaction fee. Then you have to deposit the cash, wait for it to hit the bank, and then you can make the purchase. Sounds like a 10-15% loss on every transaction. Hardly compensated for by the mediocre climb in gold prices
"You can't buy stuff online with gold"
#1 europac gold-backed credit card
#2 Goldmoney.com
Yes, you can buy stuff online with gold, and in the case of goldmoney.com with platinum and silver too.
I find cash more restrictive. There are all sorts of rules & nuances about how much is acceptable and in what form - bills, coins and credit/electronic - and on top of that there's taxationn/tracking whereas gold has none of those risks when kept hidden and the taxation risk (equal to cash) when not hidden BUT also has the lack of counter-party risk. Dollars like all paper cash & credit can fail to zero (they all WILL fail to zero, always do) but gold can't.
>You can't buy stuff online with gold
Dumbster, FYI you can't buy stuff online with cash either.
Ok Fuckster, save your time and go post over at you-tube!
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Canadian citizenism citizen Jon Nadrer?
The very same!
(Whose gold-hating, bankster-loving, nose-picking nature is eternal.)
The retail gold dealers' business model is selling product, not holding product in anticipation of price increases. I'm glad they want FRNs, it gives me a way to turn my FRNs into real money. BTW, I really appreciate that you are so concerned about my friends and family.
Well, every single investor I know with signficant net worths has physical gold in their porfolios. Moreover, every single bank that has actually survived the last 200+ years holds golds in their vaults. Gold is not an investment, it is a safe store of wealth. Know the difference. I accumulated mine at a dollar-cost average of ~$325.00 an ounce. Let the price drop, I don't give a shit. FYI, silver is also a commodity as well as a monetary metal with some value as a store of wealth. But you are probably right and 2000+years of history are wrong.
So why not take your winnings? Why push your luck? Raw speculation that the market will climb higher? I invested all my savings in Apple in 2009 and doubled it (with the help of margins). I was too cocky to sell out and kept buying. Then one day it dipped and my gains were wiped out and replaced with losses. I wish I would have know to just take the winnings, but all I could see was dollar signs. And I paid dearly for it. For my experience, I lost a considerable amount of my life savings to that point when I should have had a solid 20-30% gain, easily. But I didn't listen to my instincts and to what wiser people were saying. Oh well, just saying...