Can Gold turn Sour?
Isaac Hayes - 27 March 2009Gold could move substantially higher as governments all around the world embark on a programme of printing money.
The US monetary base, the most narrow measure of US money supply, has increased more in the past six months than the aggregate total of the past 20 years.
China is also embarking on money printing money as it is no longer fully sterilizing its massive monthly foreign exchange intervention and as a result that country is deliberately inflating its own domestic money supply.
The Bank of England is now involved in its own version of printing money, which will probably involve the deliberate underfunding of the public sector deficit with the subsequent boost to the domestic money supply.
Other countries are certain to follow suit as governments worldwide.
All of this is not a cost-free exercise: the price will be much higher inflation further down the road.
Gold is the ultimate safe haven from government's attempts to debase their various currencies, and will become the asset of choice for many investors wishing to protect themselves, but will the exit door be big enough when golds time is up?Oil and other commodities which have collapsed will now begin to bottom out before rising exponentially once the economic recovery kicks in.
Equities meanwhile will begin a long drawn out recovery process which will result in higher equity indices all over the world.
Gold is outperforming every asset on earth, but I still would not buy the useless stuff.
How high can gold rise?
The stage is now set for gold to rise to $3,000 an ounce or higher as a wave of freshly printed liquidity sparks a renewed global surge into the only asset that investors will trust in these circumstances.
Some say that If investors worldwide choose to switch 1% of their portfolios into gold, the central banks will not have enough supply to meet that demand.
Gold from mining has even struggled to meet jewellery demands for the past few years, never mind demand from investors………………….all kind of funny because many years ago worlds goverments couldn’t get rid of the useless stuff.
Am I the only one that hates Gold?.............like I Said the “exit door” wont be big enough for all to fit through.
I mean honestly, just where do all these gold lovers think there going to go once gold turns sour?
