Bank Of America: Gold Upgraded To AAAA, 12 Month Price Target: $2,000

A day after the US downgrade to AA+, Warren Buffett (who elsewhere continues his op-ed uber-campaign in hypocrisy by writing in the NYT that the government should "Stop Coddling the Super-Rich") said that in his book the US is AAAA. Amusingly, hours later S&P downgraded Berkshire to pari with the US. Judging by the record near surge in volatility in the ensuing days, the market was not too convinced with the octogenarian of Omaha's latest orations. What it was more convinced by, judging by market results, was the fact that Bank of America upgraded something totally different to an AAAA rating: gold, with a $2000 12 month target. To wit: "High commodity prices have now created a terms-of-trade shock for importers, feeding into current accounts, the financial sector and, ultimately, sovereign debt. How will these imbalances unwind? Physical gold is the ultimate collateral because it has no credit risk, so EM Central Banks have been diversifying their foreign exchange reserves into gold and other non-dollar, non-euro assets in recent quarters. Looking ahead, the deterioration in credit quality in Europe and the US coupled with an increased probability of QE3 means these pressures will continue. As a result, we revise our 12-month gold target to $2000/oz." Basically everything that Zero Hedge has been saying for about two and a half years now. Naturally, this coming from Bank of America, should set of contrarian call alarm bells everywhere. Regardless, here is BofA's Michael Widmer explaining his call, as well as the full upgrade report from BAC, which lately has far, far greater problems than getting its commodities call right or wrong.

And gold AAAA upgrade report: