Can Gold Make a Stratospheric Rally?
Given the recent gyrations in the stock market, investors are thinking about other markets. They wonder; should I invest real estate, art, or the dogs of the Dow? The thought continues; should I invest in commodities in general via an index, or precious metals specifically?
Investor, writer and chairman of Casey Research, Doug Casey, likes the latter. In a recent interview, Mr. Casey said the following after being asked just how high could gold go when commodities began a bull rally?
I think gold will do the same, although not to the same extent. My prediction by the end of this year is that gold will hit $2,000. In 2019, $3,000. In 2020, $4,000. By the time this bull market peaks, gold could reach $10,000. But I hate to say things like that…because it sounds so outrageous.
But look at the number of dollars in existence ($3.635 trillion in the M-1 money). Divide that by the 260 million ounces of gold the U.S. Government is supposed to own, and you get a gold price of $13,982/ounce.
Look at the number of dollars that are outside the U.S.—$10 trillion, $20 trillion, who knows?—and that liability is growing by $50 billion annually with the balance of trade deficit.
At $1,300 per ounce, the U.S. gold holdings can’t even cover a year’s deficit. And consider the fact that at some point those dollars will need to be redeemed by something if they’re going to retain any value.
The price of gold—if gold is going to be fixed to the dollar again, at least for the purpose of trading with foreigners, with foreign governments—is going to have to be much higher than it is today. Of course, I don’t think the dollar should exist, nor should the U.S. government even be in the money business; it just confuses the issue.
Money is a medium of exchange and a store of value—it shouldn’t also be a political football, and a means for the State to finance itself. Gold itself should be used as money. Remember that the dollar—like the franc, the pound, the mark, and what-have-you—were just names for a specific quantity of gold.
So a six-to-one shot from here is not at all unreasonable over the next several years. And that would mean very good things for gold stocks.
As the interview continued, Doug Casey continued to talk about gold. When asked about just exactly what he buys, he said it was both gold stocks and gold coins. He buys gold coins whenever he can and just puts them away – as if they never existed.
Asked about which type of coin he buys, Doug Casey answers, “Paying the premium is worth it. Incidentally, I also prefer to buy semi-numismatic coins, like British sovereigns, French Louis d’or, Danish crowns, and the like.”
Gold in nearly any form, but especially premium gold coins, are a great investment for the future. Premium gold put in ones IRA is another way to save for the future and protect against the wild, increased volatility in today’s world.
Call Tradition Gold today to buy premium gold coins for your IRA and protect against tomorrow’s inflation.
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