Gold $15k?

A couple of gold bugs talking it up:

Both of these blokes are from the Austrian economic school so you need to be careful of their more extreme price projections.

I don’t see any return of the gold standard nor erosion of the USD as the global reserve.

But I can still see gold shooting much higher on negative interest rates (real and nominal) and a falling USD (which will require a better recovery than we have now).

My basic take on gold is that it operates as the undollar and is leveraged to the relative strength or weakness of the underpinnings of the USD, largely monetary and fiscal.

So long as there is instability in those inputs, gold should climb.

How high who knows!

David Llewellyn-Smith
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Comments

      • The amount in fiat is irrelevant anyway — if a loaf of bread cost $60 in a couple of years time then gold will definitely be trading north of $15,000. And if it isn’t you be in on a losing bet.

          • They’ll undoubtedly move but that won’t have any impact on the price of gold — the point I was making is that if inflation is high then gold may or may not be that exciting at $15,000. In order to be a winning trade it needs to have appreciated much more than inflation.

            If the price of gold were to go to $15,000 and a loaf of bread still costs $3 then that’s a winning trade.

    • +1 lets get those property spruikers into gold!!! when Switzer starts spruiking we know its on like donkey kong

  1. Schiff has been predicting “the next crisis will be a currency crisis” since 2008ish.

    A prediction of 15k USD gold is anchored in that belief.

    Maybe he’ll be right.

    • run to the hillsMEMBER

      Yep Schiff was given credit during the GFC for calling the US housing crash in advance but he’s been a broken record ever since about the imminent demise of the USD, he may be right with that call sometime in the future but he’s been wrong for a long time now.

    • I download all of Schiff’s podcasts. He’s a slapheaded, unreconstructed neoliberal dinosaur, but his quick diction and glib tongue make for a very soporific experience at night. He’s better than a sleeping pill for me.

    • That sort of projection seems to be based on a high dose of DMT in conjunction with MMT.

    • MMT destroys. On the plus side, no need to pay taxes as governments print to finance costs. Some wag at Our ABC said taxes still necessary for “equity” but as key premise of MMT is to fund government spending including social welfare programs, nah.

      A little hyperbolic, a little simple, but inevitably, the end of things as we know them. Beware unknown unknowns.

    • Go Mike! At least he’s entertaining and easy on the ears – and who knows maybe he’s right?

      But I agree things’ll be pretty bad for many, so it would be better for most if it stuck to DLS’ $3,000

  2. Based on James Turk’s Fear Index, US Gold could be valued around $80k USD per ounce. I wish….

  3. Gold will get smashed before the US election by wall st.
    Gold is anti fiat and therefore anti government. When fiat money is free how hard is it going to be to short the fake paper gold market? Short it waaaaay down.

  4. Gold has been manipulated for years. Why would the establishment stop now?
    Answer. They havent. They are letting in suckers so they can crash it again

  5. Aussies Can't Socially Distance

    I’m still long precious metals, but I love seeing gold bugs get smashed.

  6. $15K? Seems far fetched, and I can’t believe it would even materialise in the medium-term.

    I won’t say ‘never’, however…!

    I can’t buy and hold gold at the moment – with a base of some e-gold and major miners, I am making some decent gains, selling, watching, getting in, selling again…repeat…I’m comfortable with this.

    I ‘believe in’ gold, but not that much…at the end of the day, it doesn’t really do much and I would prefer to hold good stocks and bonds.

    Disclosure: I’m a reformed gold bug who’s made decent money from gold over the years.

      • I still hold plenty of gold assets, but i hold them lightly.

        For example, I sold some this morning, after the overnight rally – good profits, so I booked them, but didn’t sell major miners nor PMGOLD.

        Gold still has its place, particularly when faith in the system is getting pounded, and people are looking for a non-system (or close to it) place to store value.

        • With 20% of new gold coming out of the ground going to central banks for some kind of Monopoly holding to protect against their own currency manipulation, and 80% of the remainder going to jewellery, I have never understood the modern attraction to holding gold. It’s only an inflation hedge because everyone says it is (and isn’t if you time it wrong), it has a small and declining commercial usage, and is one of the biggest examples of an unclothed emperor I have ever seen. I realise everyone could continue the facade that gold is a great hedge because, well, “it’s gold innit?” long after I am cactus, but have yet to receive an explanation that deviates far from collective belief. As @Burb you appear to have gamed the system I would be grateful for any explanation around the non-systemic aspect that isn’t just collective belief because it has me stumped!

          • Michael Johnson

            Phil,
            Gold is just an alternate currency. It is a medium of exchange easily tradeable but not easily replicated. Compare that to fiat currency printed (electronically) at will by governments around the world. It is also not a collateralized debt funded asset prone to collapse. It is pretty clear to me which medium of exchange I would prefer to hold as excess savings. The main driver now to insiders is that the game of rate cuts is over and we are moving to overt money printing by central banks (MMT) with helicopter money already happening (direct to populace). The rest you can work out yourself (….or ignore). Suggest you watch Jay Powell interview on US 60 Minutes and come back to me.

          • I am GrootMEMBER

            It is a strange creature isn’t it? Almost without exception I see that all those causing environmental damage desperately seeking the stuff can’t wait to exchange it for the very thing it is supposedly superior to – fiat currency. So they can get rich, preferably quickly. Sometimes this is to pay bills which require payment in fiat, but even those who are flush do the same.

            I feel it has some value, but how you determine its appropriate price at any given point in time is beyond me.

          • Hi Michael, thanks, that is starting to make sense. So, if I understand correctly, it is a limited fiat (given there is new stuff coming out of the ground every day and existing could, in theory, be recycled from Indian dowries into currency), currency that is easily exchangeable into other major currencies. But ultimately, that is still reliant on everyone believing that it is a valid currency. Which, of course, is the same for any currency absent any tangential commercial purpose (as an example, following the gold lead, oil could technically be used as a currency or as a product), I’m just checking that I understand it correctly as viewing it as an alternative to AUD, USD, GBP etc. makes perfect sense – but it also confirms my suspicions that there isn’t anything additional that I am missing. Genuine question (it’s disappointing that I have to say that but genuinely trying to educate myself and wanted to telegraph that I’m not trying to troll in any way). Thanks

          • Hi Groot, that’s a great point that the gold “currency” is only effectively a storage currency, you can’t really use it to pay the everyday bills. I know of other “currencies” like that!

        • BigDuke6MEMBER

          I’m with you. I’m a bug of 20 years so have learned the hard way. As you have too by the sounds

  7. “I don’t see any return of the gold standard nor erosion of the USD as the global reserve.”

    You would be the only person even remotely involved in economics or finance on planet earth who thinks that. Honestly not sure if that is just being controversial for the sake of it, political narrative or somehow you have missed the entire global narrative around Asia and Europe with regards to currency during the global pandemic.

    Seriously odd thing to write though.

  8. – The USD is “on its way out” as the world’s reserve currency. To see the reason why one has to look at a set of US economic data. That gauge has been in favour of the US between say 1995 and (late) 2008. But since 2009 that metric has turned its back on the US. And the metrics of that gauge is getting worse and worse. Once the US starts running Current Account Surplusses again the PETRODOLLAR is “toast”.

  9. Aussie1929MEMBER

    I believe bullion banks got themselves in a shorts trap. Might need to let the price go up to save themselves