What price is high enough? The answer to that will reflect the state of confidence within the current monetary system. Confidence will be heavily influence by the extent of nominal debt destruction through direct and indirect default into 2016.
The trend in total credit market debt as a percentage of national income will influence confidence within the old monetary system. The liquidation process, if permitted, will help restore confidence. Of course, this is only the officially recognized credit market debt. Accounting "flexibility" hides a much larger burden.
Total Credit Market Debt As A% GDP:
It doesn't take much insight to recognize that the liquidation phase has only just begun. The termination of the blow off phase represents the initial stages of the Great debt revaluation. The Great debt revaluation as defined by the upward revision in the price of gold began in 2000.
How long the world attempt to exude confidence while looking the other way?
The economic gain for each dollar of debt created has slumped well below the Great Depression lows. The law of diminishing returns has begun to handcuff policy options.
Annual Gross Domestic Product (GDP) per Annual Total Credit Market Debt (TCMD):
Annual Income Growth per Debt Creation
It will be impossible to define the ultimate price target because mathematical equations cannot predict emotions.
The trend, however, remains up. A 5-handle looks extremely plausible. The final value, driven by emotions, will likely surprise even the bulls.
Gold, London P.M. Fixed:
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I had a few questions that I would like you to address if you can.
Several years ago you made the comment that the time would be coming when, if a person had the money, they could buy whatever they wanted for pennies on the dollar as people would be trying to sell whatever they had to pay off their debts. Is this still a likely future event or will hyper-inflation just cause the cost of things to sky-rocket and if you need something like a used car, etc. you should buy it now?
Own gold then buy toys if you must. That is the way to buying for a value of peanuts in time.
I have my portfolio divided between 2 different brokers. Is it still critical to take the stocks out in certificate form? I'm not so much worried about having a hold put on my account even for several months, I haven't been trading my positions much anyway. I've tried to get into mining companies that are performing well and I'm just holding what I have. But I sure wouldn't want to lose my positions. What is the likelihood that one day I could find out that my positions are gone if they're held in my broker account?
Gold is properly defined as insurance. Every thing gold is a gradient of insurance. Is is not wise to keep insurance close at hand?
However many gold companies no longer issue paper certificates.
If things got that severe in the financial markets would you consider it to be more likely to happen during the second run up from $2500 to $10000 gold that Armstrong is predicting?
My deep respect for Alf and Armstrong move me to say they will be right at some time in the not to distant future. However $10,000 is a reach.
Is having the stock held in my name by the clearing house sufficient or should I be holding the actual certificate?
That is called direct registration and is the second best route to take.
Are you still holding to the position that if we don't see $1650 gold by Jan. 14th that it will be $3000-5000 in June?
When you make a statement only a woos wiggles away. I stand by what I have said recognizing that I may have made a fool out of myself in public. The fact that I said $1650 many years ago is no excuse if I am wrong on January 14th 2011 and gold is at $1550.There is no gray, for a responsible person, in what you say.
Thank you for your time,
Steve
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