Re: on track for $1000 gold by Christmas! - Inflation
posted on
Dec 11, 2008 01:28PM
Focused on becoming a near-term Gold Producer
In my opinion, gold will only ever go to $2 or 3K or more if parts of the world go to war.
Not that I was around at the time, but during WW2 Hitler printed and printed money, but it was not worth anything outside of Germany. Pure and simple, people did not want this money. Instead, the people of Germany who wanted to be able to sustain their wealth bought gold and physical gold, not paper gold because it was worth something to other people. I had this discussion with a professor of mine a few years ago and this was his opinion as well.
People seem to claim that the U.S. is causing inflationary pressure because of all the money they are printing. This might cause some upward pressure on the price of gold, but all of the other countries in the world are printing money as well. There is also the thought that gold should go up because of a shortage of physical gold in the market, or that people will start demanding delivery of the paper contracts, which does not seem to be having much of an impact. I can admit that the demand for physical gold has increased, especially since August/September. This is such a small percentage increase compared to the total amount of physical gold in the world that there seems to be a very minimal impact overall.
I am not oppososed to the price of gold going through the roof, especially since Sage and other gold companies I own would benefit, but to go to $3 or 4K would mean the entire world was in great turmoil and countries currencies were becoming worthless. (Hence the idea of war). Inflation would need to be 300% and more to push gold to these levels and as Clint points out, we are nowhere even close to that.
Anyway, just some thoughts a subject that will really take many years to fully understand. I'm just beginning to understand this and enjoy the many opinions on the topic.
Lets hope Sage doesn't need $3000/ounce gold to get back to $0.20 and that they can do it with what they have in the ground at Jacobus.
Cheers =)