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GOLD …
What’s Going On?
UK Investor Show, April 13, 2012
Target 1: Dow : Gold … 2: 1
Target 2: UK House Prices < 100 oz of gold
Target 3: End Of Negative Real Rates
• CPI = 2.8%• RPI = 3.2%• Is real inflation higher?• Bank Of England Rate 0.5%. • Cash loses you c. 3% per year
• NRR better than last year, but still negative.
Target 4:
US gold matches US debt
Gold's role "during periods of monetary stress" is to "balance the international balance sheet of the USA". Jim Sinclair
• 21st January 1980 Sinclair sold his gold, the day it spiked it to $850.
• The value of US gold ($221bn) exceeded US monetary base ($160bn) by 140%
• According to the US Treasury the US has 261.5 million oz of gold.
• Fort Knox gold has not been independently audited in 50 years.
• In his book Good As Gold Chris Weber argues all the gold is not there. Let us assume it is.
• At $1,500 per oz that gold is worth $392 billion, or $0.392 trillion.
• US National Debt is currently almost $16.8 trn
• US Total Debt is $59trn
• US Monetary base now = $3 trn
• US Monetary base now = $3 trn
• If US gold = 100% US paper, gold price would be $11,494 oz (3trn/261m oz)
• If US Gold = 140% US paper, gold would be $16,000 oz
• And rising …
• If US were to pay all its $16trn debt with its gold, gold price would be …
• $17 trn / 261 million =
LOL
• If US were to pay all its $16trn debt with its gold, gold price would be …
• $17 trn / 261 million =
$65,134 per ounce
• In a world awash in unpayable debt …
• Obsessed with growth
• Where so-called austerity makes governments unpopular … and unelectable …
• system that relies on ever-expanding debt to function and grow
Target 5: Fiscal Sanity Returns to Govt.
• Rates are too low, yet will stay low.• Policy-makers always take the path of least
resistance, which means they will print.• Austerity a sham. Tullett Prebon report shows
public spending has hardly been reduced. 1% down on last year. 3.4% UP on Labour’s last year.
• Deficit only been cut through tax rises.• Do public and media want spending cuts?
Cameron and Osborne’s Economic Policy
Target 6 – UK Govt. buys
Can you explain to me why, with currency wars, currency debasement, European turmoil, confiscation in Cyprus, economic and political uncertainty, North Korea etc etc, why gold is behaving like a risk asset ?
Why is gold falling?
Because it is.
• In March COT reported Gold short positions reached the highest level in over a decade
• In early March Gold's Public Opinion reached one of the lowest levels in at least a decade
• Last week COT reported Silver short positions reached the highest level in almost two decades
• Last week Silver's Public Opinion reached one of the lowest levels in at least a decade
Biggest lesson investing :
Nobody knows anything
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