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Martin Armstrong - Gold Bullion To “Max Out At $5,000 Per Ounce”
Martin Armstrong - Gold Bullion To “Max Out At $5,000 Per Ounce”
- Fall 2015 turning point - civil unrest and riots globally says forecaster Armstrong
- Fed have to raise rates - due to pressure from congress and media
- By 2020 the cost of servicing U.S. debt will outpace defence spending
- European banks will collapse and “blood in the streets”
- Higher rates will also devastate emerging markets who have issued dollar-based debt
- Gold to “max out at $5000 per ounce”
- Advocates diversification and holding bullion coins familiar to public such as $20 gold coins
- “Your portfolio has got to include everything … including bullion”
Renowned financial analysts and trends forecaster Martin Armstrong has said that gold will “probably max out at $5,000 per ounce” as “people lose confidence in government” and that we will see riots and unrest globally in the coming months - the fall of this year.
It a very interesting interview with Greg Hunter of the excellent USAWatchdog.com, Armstrong says:
“Gold rises when people lose confidence in government. It has nothing to do with inflation. So, when you start to worry about government is not going to survive or who’s going to win, that’s when gold rises. Short term, we still have the risk of it going under $1,000 per ounce. It’s going to flip when everything is right. It will probably max out at $5,000 per ounce. . . . You are really talking about a major reset coming. 300 years ago, that was the revolutions against monarchy. Today, it’s going to be revolution against . . . pretend democracy. We do not have a democracy.”
We would slightly disagree with this as research and the historical record shows that gold is a hedge against inflation - particularly virulent inflation as was seen globally in the stagflation of 1970s and the litany of hyperinflations seen in the last 100 hundred years.
Martin Armstrong was accused of running a $3 billion Ponzi scheme and served 11 years in jail under house arrest, including a possible record seven years for contempt of court in a dispute over gold and antiquities. He is a former financial adviser who was Chairman of an investment firm called Princeton Economics International and he is best known for his economic predictions based on the Economic Confidence Model, which he developed.
Armstrong says you can forget about the U.S. dollar crashing in value. Armstrong contends, “No, that’s absurd. The euro is in terrible shape. The yen is in terrible shape, and honestly, you can’t park money in yuan or Russian rubles yet. I mean, let’s be realistic here, but eventually– yes.”
He contends that the Fed will be forced to raise interest rates in the coming months which will have serious implications world wide.
Armstrong predictions are based on the theory that everything in the world happens in cycles. We are currently near the end of a major 300-year cycle. The end of the last cycle saw revolution against monarchies. This cycle will end in revolution against corrupt democracies. Indeed, he reckons that government corruption worldwide is now at an extreme.
He warns that “governments are run by lawyers” more concerned with reelection rather than “financial experts” ... “thats our biggest problem …”
He suggests that capital inflows to the U.S., particularly from China, will continue to push up the stock markets and real estate in the U.S. This will cause congress and the media to blame the Fed for the bubbles with the consequence that the Fed will raise rates.
He warns of the bubbles in the bond markets:
“… this one looks like it's going to be in the bond markets….it's the peak, really, in government and you have interest rates going negative and you can't have much lower than that. So this appears to be the peak in so far as government is concerned and bond markets are going to be turning down.
I mean, we're in a lot of trouble with most of these governments. Our models are really showing that by 2020 the amount of interest we pay to roll the debt constantly will exceed the entire defense budget.
In the longer term this is clearly untenable and has obvious ramifications including much higher interest rates in the U.S. and a much weaker dollar."
He refers to the culmination of previous cycles such as Russia in 1998, the dotcom bubble and the real estate bubble and postulates that this 8.6 year cycle will result in the collapse of the bond markets.
Raising rates will have a particularly devastating impact on emerging markets who have issued dollar based debt with the result that they will end up "like Greece" unable to pay the interest on their debt.
He sees little hope for European banks. The euro which assumes all participating countries are the same is untenable. He says that in Europe, people buying German assets and debt in the expectation of a collapse in the currency and in the hope of redeeming such assets in newly issued Deutsche Marks.
He says that gold may hit $5,000 in the U.S. but has the caveat that $5,000 would not have the spending power that it has today and says a week’s wages may be $5,000/oz.
We believe that this is unlikely. Workers being paid $5,000 a week would mean the U.S. is experiencing hyperinflation. This would likely result in gold rising parabolically to levels over $10,000 per ounce.
He advocates a well-diversified portfolio including precious metals. He adds that that people should include coins that are familiar to the wider public.
Greg Hunters asks Armstrong whether he would be a “holder or buyer of gold at some point?”
To which he replies that “your portfolio has got to include everything … including bullion” and says it should be bullion “familiar to the general public.”
“You have to realise that if you walked into a Starbucks, and you have a silver quarter you know what it is .. is the kid at the counter going to know what it is … he is going to say it is a quarter.”
Presumably alluding to fact that popular “recognisable” gold coins will remain in demand, may be used for payments, trade and barter and will remain liquid in an economic crash.
He warns against gold and silver bars due to the potential risk of counterfeiting and potential trust issues with some bars. He thinks “staying with recognisable gold coins is better” and gives the example of the “$20 gold pieces and things of that nature.”
Armstrong warns that gold could fall to $1,000 per ounce in the very short term, coming months, prior to surging to $5,000 per ounce.
Hunter is a good interviewer and asks the right questions and the interview is a worth a watch.
Find the Safest Ways to Own Gold: Comprehensive Guide to Investing In Gold
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,189.85, EUR 1,123.56 and GBP 808.58 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,191.45, EUR 1,127.95 and GBP 814.33 per ounce.
Gold fell 0.6 percent or $7.20 and closed at $1,192.50 an ounce on yesterday, while silver slipped 0.61 percent or $0.10 closing at $16.20 an ounce.
The March U.S. retail sales figure missed market estimates yesterday, but a strong U.S. dollar seems be keeping gold at bay for the moment.
- Gold in USD - 1 Month
Gold in Singapore remained steady at $1,193.42 an ounce near the end of day trading after hitting $1,183.68 an ounce on Tuesday, its lowest price in two weeks. Comex U.S. gold for June delivery was unchanged at $1,193.50
Holdings of the world's largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, rose by 1.8 tonnes yesterday, data from the fund showed, only its third daily inflow since mid-February.
China’s economy had its slowest growth in six years growing only 7 percent in the first quarter, which some analysts say may stifle their demand for bullion. However, it could lead to increased safe haven demand particularly if there are falls in Chinese stock and property market.
Premiums on the Shanghai Gold Exchange picked up to $3-$4 an ounce over spot price from a lower range earlier in the week.
As usual Fed committee members are making it difficult to get a clear reading on if and when the Fed may raise interest rates. Minneapolis Fed President, Narayana Kocherlakota, said raising rates this year, as most Federal Reserve officials expect, would be "inappropriate" because it would delay the return of too-low inflation and the Fed's 2 percent goal.
The Greek debt sage continues as government representatives and the nation’s creditors continue talks in Athens. Gold should be supported by uncertainty regarding a potential Greek default.
In Europe in late morning trading, gold is trading in euros at €1,124.140 per ounce or up 0.24%. Silver is trading in euros at €15.25 or up 0.39% and platinum is at €1,075.88 or up 0.27%.
In U.S. dollars in Europe in late morning trading, gold is at $1,191.91 or off -0.17%. Silver in U.S. dollars is at $16.17 or off -0.02% and platinum is at $1,151.90 or down -0.06%.
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"due to pressure from congress and media"
I like armstrong in his way, but that line is pretty funny.
The media doesn't put pressure on the ground when it walks and not even Elizabeth warren seems to want to pressure the fed.
Or, it's a setup.
http://redefininggod.com/nwo-schedule-of-implementation/
I don't know about you but I've got some popcorn ordered for the "fall". Saying "fall" is spherist by the way.
Anybody attempting to predict the price of gold or prognosticating when that price will materialize can be summarily dismissed. Life has taught me that these false prophets are simply full of shit.
History and experience have shown me all 'prophets' are just full of shit con men.
Correct. Armstrong is a disinformation agent of .gov. Anyone who can say with a straight face, “Gold rises when people lose confidence in government," when he KNOWS that the correct phrase is, "fiat falls when people lose confidence in government" should be summarily dismissed.
I gave you an up vote on your analysis. There is however one unknown that, after watching pm prices stagnate for so many years, I have come to respect. That is unreported above ground supply...
China and Russia have stockpiled gold unerringly for years, rumors abound over actually how much. Despite that accumulation, paper has controlled the market and delivery's came and went without swaying paper controls at all. So the doubts arise in my mind on the validity of the published above ground supply estimates.
Despite vanishing fiat confidence, if rumors of ancient gold stores have any validity, there may well be a CAP on the fiscal price that is presently hidden. I do think 5000 $ is a conservative number but considering the uncertainty of actual historical above ground stores, would not be surprised if significantly exceeding that value proves to be a temporary situation for the opportunist.
$5000/oz gold implies a US debt of about $55Trillion. This will most likely occur if the world market abandons the dollar and unfunded liabilities become priced in. The estimates for these run all the way up to around $90 Trillion ($8000/oz.). The ensuing market panic would drive it to $10000/oz. easily.
See http://reprice.blogspot.com/
Undeclared production is one kind of black gold; illegal production another kind; unknown private holdings yet another.
Here's a roster of the types of black gold out there.
http://reprice.blogspot.com/2014/02/black-gold-vs-dark-gold.html
I have to laugh when I see things like, "All the gold ever produced would fit in a [whatever]."
Am pro-gold but please realize that gold production is a state secret in two major producers and that it is a private secret among gold owners. Even "democratic" governments lie about their holdings.
Gold supplies are a mystery. We can try to track the flows but even that yields a partial answer.
Every Fall we have gold miners selling placer to us. Some are hobbyists while others are professionals. The hobbyists have smaller quantities but there are many of them. In spite of that, the vast majority of placer gold mined in North America is done so on a professional and recorded basis. I know this for fact as I deal regularly with one of the largest refiners and I have a good rapport with the mangers there. The gold we buy from hobbyists eventually finds its way to an official refinery.
While it may be true that unreported gold production is more significant in some areas, the vast majority of gold is mined using significant capital and thus above board.
So called dark pools of gold amount to little more than fairy tales (Yamashita's gold) to create a sword of Damocles over investors heads. Gold is truly a rare element and exists in known proportions in the earths crust. It's rarity gives it value and those who claim that gold is ubiquitous seek to destroy that value for one reason or another.
It is true we do not know exactly how much gold is above ground or even how much is really in official or private hands. Reasonable estimates can be made using known variables and differentiation to give us a "reasonable" number concerning production.
My point is we can have a reasonably accurate picture of world production and even historical production. The problem arises as to where that gold resides as the central banks who report holdings have no credibility.
Thanks for the overview. It's funny how some people think that their crumb represents the whole loaf.
Armstrong is looney and a felon, hard to believe anybody takes him seriously. For comedic purposes only.
How do you know Armstrong, Irwin Schiffhttp://en.wikipedia.org/wiki/Irwin_Schiff and Bernard Von Nothaus http://en.wikipedia.org/wiki/Bernard_von_NotHaus are onto to something?
They've all been to the grey bar hotel, political prisoners.
Please clarify those 'comedic purposes' good sir.
Are you talking about Armstrong, the American Mental Healthcare System or the American Law Enforcement Regimes.
this clown has more cycles than the tour de france. talk about making up shit as you go! we're reaching the 300 year cycle.....WTF. i personally like the 700.896231846 decade cylce....won't made a financial move without it......PONZI.
Pridicting the price is tough. Here is a cool little calculator that helps you buy more on the dips. With the possiblity of the fed raising rates or another deflationary scare there could be some better buying opportunities in the future. This little program puts you on a system to buy more as the price goes down and less as it goes up, but you don't have to try and time the market. Its a free download, try it out and let me know what you think:
http://www.debtcrash.report/entry/debtcrash-metal-purchase-program
$5000 an ounce for gold???? Dream on gold bugs.
Deflation might give us $250 gold. Hyperinflation $50000 or more. But $5000?
Deflation will give us $3,000 gold and those gains (in real terms) will be the best we get. Later gold will go to much higher dollar prices but it won't mean a whole lot as the dollar (and most credit based currencies) crash and burn.
Deflation will create havoc in the financial sector. No institution will be safe including central banks. Deflation means that there will not be enough currency to service debts and everything that is financed will collapse in value. You will be far ahead trading some gold for a home or property when it is at $3,000 than when it eventually gets into $15,000+ pricing.
The general public will likely not be buying gold but the demand from institutions and the wealthy will move the price higher in spite of manipulation. It should be noted that the general public does not buy gold in any meaningful quantity. They will continue to sell the little bit of jewellery they may have as well as the odd coin in a collection.
I used to follow Armstrong and he is clueless about gold. The predictions he made in the past were so off he has no credibility in that arena. Eventually he may get lucky and something he predicts will actually occur. I am not watching to see what it will be.
It all depends. Too many factors. If things really collapse far, gold won't matter. Food will become more valuable. And the business end of a gun will determine settling matters.
If some sort of civility can be maintained, gold might be reasonable asset used to tranfer some sort of "wealth" from one system to another... assuming that government doesn't just confiscate it. Art, exotic cars, real estate, etc. are all things that might also fall into this category.
Somewhere in-between, gold might be what is needed to just get the hell out of a bad place.
Is good insurance. But, if anything is buying this because they think the world we came from is going to return someday - and they will be living like rock stars because of thier "stacking" abilities - well, good luck with that.
On the flip side, people doing nothing just might not make it to the other side.
Look at Argentina and tell me what percent of Argentinians wished they had converted all of their pesos into gold before the collapse.
Bingo. It's not the fiat currency you convert it into, it is what you can exchange for it.
Gold will always buy you food, shelter, and a piece of ass.
Was watching The Keiser Report latest edition last night and the Banker guest was telling Max that people were putting stacks of fiat in storage but not gold. With negative interest rates upon those in Europe it make sence to just have money out of the banking system and people are so conditioned for fiat and against gold that they wont even consider gold. Only fiat. WTF!!
Max Keiser also said that Bernarke is not Jewish.
The question has been asked before about Argentina and other countries. Why don't they buy Gold with their fiat? what they buy is USD's in the black market when they fear hyperinflation. I've never gotten a good answer.
it's simply because the USD is as good as gold. Right now. It is the hard currency for these derivative currencies of the dollar, ie argentina.
When HI hits the dollar, there's no next harder fiat. It's called hide in gold. That's the end of this dollar system.
Any kind of military defeat over US forces that are in a number of places they don't belong would speed things up. Stakes are high.
Why would physical Gold bid for fiat in such an environment?
That's not thinking it through enough. Nor the correct viewpoint to view it from.
No, paper would go bidless (hyperinflation) and Gold would go in hiding during the ensuing storm.
Gold, like anything else, has a time to buy and time to sell. During a storm, it is likely it would go into hiding. Just like in Ancient Rome. I agree.
But, there are alot of variables here. Consider how in some places right now alternative currencies are being used in lieu of the local currency because of loss of faith that the domestic currency won't go "poof" the next day. You going to eat your gold? Or are you going to transact in order to survive. In this case clearly there is some civility left. And having gold was a good hedge. The pay off was to continue living versus starve. Maybe hold onto other assest in the process like a home.
The problem here is that most people do not consider how dynamic the coming crisis may be.