Following the biggest one-day surge in the price of gold since 2009, it is understandable that suddenly everyone who until recently was predicting the price of gold in the triple digits, or laughably explaining why "gold is doomed" wants to talk about the "pet rock." As we showed earlier, already Goldman and Bank of America have opined with new and upwardly mobile "price targets", while the scramble to obtain gold in a world drowning not only in negative rates but soon, cash bans, has already been unleashed.
And yet, nobody summarized the sentiment quite as well as the "Global CIO & Head, Global Fixed Income, Currency & Commodities Group" (did they forget to add something to that title) of JPMorgan Bob Michele, who earlier today was on CNBC and admitted the following stunner.
There is a serious credit contraction underway, I think [Yellen] should acknowledge that. I think she has to look at the capital base being wiped off the banks in this downdraft and equities: that's not supposed to be happening right now. They're supposed to be bulletproof, and oh, by the way, gold at $1,200 an ounce, what does that tell you? It tells you that in a flight to quality, in a safe haven, people have more confidence in gold than in bank deposits or paper money. I think things have gotten out of control."
"Stunning", because we have nothing at all to add.
Oh, and if Bob is confused why "things have gotten out of control" and suddenly everyone is rushing to gold, then this should explain it.
Full admission 30 seconds into the clip below.