Crystal Ball Craziness

pmbug

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Rickards’ analysis points the gold price to $15,000 by 2025.

“I would put [gold at $15,000 an ounce before 2025,” Rickards told Kitco News. “If you just take the average of the prior bull markets: 1971 to 1980, nine years, 2200%, 1999 to 2011, a twelve-year bull market, about 700%. Just take the average, you don’t have to go to the higher of the two or extrapolate, if you just take the average of the two you would say the next bull market is going to be a little over 10 years and it’s going to go up 1500%,” he said.
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Schiff added that at the current levels of the Dow Jones, the price of gold will have to equal $26,000 an ounce to achieve a 1:1 Dow/gold ratio.
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Rickard's prediction assumes past performance is predictive of future returns. Maybe, maybe not. One thing that is niggling the back of my brain though is that the money supply growth during the periods Rickards cites was on a much flatter slope than what is occuring right now. *If* his thesis is correct, and *if* the bull market is related to moentary policy (ie. growth of Fed balance sheet / money supply), this bull run might see more growth than he's expecting. Of course, the US and/or global economy could devolve into a destructive deflationary spiral and everything could go in the toilet.

Schiff's comment doesn't address the fact that US Equities are in a Fed created bubble and have absolutely no basis in reality anymore. I'm not sure that's really the key variable you want to use in an equation for forecasting anything.
 

shinnosuke

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Might as well say that the price of gold is going to infinity. In my lifetime, an ounce of the yellow metal was $35. For that same material, #79 on the Periodic Chart of Elements, to be valued at $15,000 is the same thing as saying that toilet paper has more value than FRNs. Who could trust the FedRes or the government at that point? Only people who are 100% dependent on the government for their livelihood. Sadly, that is an ever-growing segment of the US population. Anyway, forget gold. The real bang for your buck will come from Ag.
 

rblong2us

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Its long been suggested that any new monetary system would have to be backed by something tangible, just like the old one once was.

If it becomes golds role to do this then it has to be able to buy a great deal more than it currently does.

As for trusting the Fed / Gov, nothing new here but if no one will accept your worthless paper then an alternative has to be found that is acceptable to others.

Silver may well do better than gold but theyve been saying that for as long as I have been following the metals (-:
 
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