Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world’s monetary system with liquidity, according to an internal client note from the US bank Citigroup. The bank said the damage caused by the financial excesses of the last quarter century was forcing the world’s authorities to take steps that had never been tried before.
This gamble was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold.”They are throwing the kitchen sink at this,” said Tom Fitzpatrick, the bank’s chief technical strategist. “The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed though into an inflation shock. “Or it will not work because too much damage has already been done, and we will see continued financial deterioration, causing further economic deterioration, with the risk of a feedback loop. We don’t think this is the more likely outcome, but as each week and month passes, there is a growing danger of vicious circle as confidence erodes,” he said.
We are already seeing countries on the periphery of Europe under severe stress. Some leaders are now at record levels of unpopularity. There is a risk of domestic unrest, starting with strikes because people are feeling disenfranchised.” Gold traders are playing close attention to reports from Beijing that the China is thinking of boosting its gold reserves from 600 tonnes to nearer 4,000 tonnes to diversify away from paper currencies. “If true, this is a very material change,” he said. Citigroup said the blast-off was likely to occur within two years, and possibly as soon as 2009. Gold was trading yesterday at $812 an ounce. It is well off its all-time peak of $1,030 in February but has held up much better than other commodities over the last few months – reverting to is historical role as a safe-haven store of value and a de facto currency.
Gold has tripled in value over the last seven years, vastly outperforming Wall Street and European bourses.
Sounds like a good way to hedge your bets…..if you can find it.
When they talk about gold hitting $2000/oz. they don’t mean that gold will get more valuable. What they mean is that paper currency will get less valuable.
You can’t eat gold. You can only buy and sell it. You could try trading it, but if it comes to the point where you’re trading gold for food, then everything will be too far gone to worry any more.
# 41 chuck said, “When they talk about gold hitting $2000/oz. they don’t mean that gold will get more valuable. What they mean is that paper currency will get less valuable.”
Of course. I don’t see how anyone thinks that by printing RIVERS of money isn’t going to cause monetary inflation.
And the good news is they’ll buy it as scrap for about 2/3 of what the fair market value is at the time!
There is no way you can just use it for money for what it’s worth in theory.
#39, Cow-Paddy, Ignorant Shit Talking Sociopath and Retired Mall Rent-A-Cop,
Yup. Keep talking like that. Nothing to add to the discussion. Sure must be like shit to be you. Since your goldfish dies, does anyone like you?
Gold does have some uses. Being so corrosion resistant it makes very good electrical connectors. Being relatively soft and malleable it can be extensively used in dentistry. Being shiny it does make good jewelry. It also has some photographic and chemical uses.