$2,000 gold?
When will gold go ballistic? asks Ambrose Evans-Pritchard in his blog for the UK’s Telegraph website.
Then he answers his own question:
Gold will fly once investors can see that neither of the two reserve currency pillars (euro and dollar) is on a sound foundation, and once the pair are engaged in a beggar-thy-neighbour devaluation contest to stave off a slump (if necessary with the use of Ben Bernanke’s helicopters, meaning mass purchase of Treasuries, mortgage bonds, stocks, or assets of any kind to support the markets). This would amount to a partial breakdown of the monetary system. Gold will not stop at $800. It might well go beyond $2,000.
Evans-Pritchard nails the real reason for owning gold: the dollar and the euro are paper currencies, and when the politicians begin printing in a big way (Isn’t the Fed already there with the dollar?) both currencies will decline, sending the price of gold skyward. $2,000 is not out of the question. In fact, $2,000 may be on the low side.
Posted by Administrator on July 24th, 2007
Category: Gold