David Rosenberg: Gold Heading To $3,000 An Ounce

I haven’t talked about David Rosenberg, Gluskin Sheff’s Chief Economist and Strategist too much on this blog. But back when I was running Boom2Bust.com, I would mention him on a regular basis. On February 9, 2011, I wrote:

For those of you not familiar with Mr. Rosenberg, back in 2007 he was one of the first economists to warn investors of the “Great Recession.” I started following Rosenberg when he was still Chief North American Economist at Bank of America-Merrill Lynch in New York. CNN Money said this of the economist last year:

Rosenberg, who left an eight-year career at Merrill Lynch to become chief economist at Gluskin Sheff last May, is one of Wall Street’s best-regarded financial experts. His on-the-ball predictions have landed him on Institutional Investors’ list of All-Star researchers for years.

Yep. Rosenberg was one of the original “crash prophets.”

And these days, he’s really bullish on gold.

Jonathan Burton posted the following on MarketWatch’s blog The Tell last night:

Forget the Dow. If you really want to make some money, buy gold, says David Rosenberg. Gold is heading to $3,000 an ounce, the chief economist & strategist at investment firm Gluskin Sheff + Associates said Tuesday in a speech at a CFA Institute of Chicago conference.

$3,000 an ounce. Significantly higher from where his old employers see the yellow metal going in the next couple years. Jan Harvey reported on the Reuters website yesterday:

Even Bank of America Merrill Lynch, which remains broadly positive on gold, cut its forecasts this week. While still expecting prices to rise strongly next year to an average of $1,838 an ounce, it sees prices turning lower in 2015.

“The importance of investors, coupled with the lack of investor buying, has led to concerns that non-commercial market participants in general have reassessed the rationale of holding gold in a portfolio,” the bank said, reducing its 2013 and 2014 forecasts and cutting its 2015 price view to $1,675 from $1,900.

Still, there’s a reason why Rosenberg was the only economist recognized for his accurate economic projections in Fortune Magazine’s “Best and Worst of Wall Street 2011” and was ranked most accurate forecaster for 2011 by MSNBC. Back in that February 2011 post of mine I called attention to what I called a “must-read” article by him in the Globe and Mail (Canada) in which he wrote:

The United States is in a radical money-easing environment, in which the Fed is keeping interest rates artificially low while pumping money into the economy. This type of policy breeds speculative rallies. It inevitably results in boom-bust cycles such as the ones we saw in 1999-2002, 2006-09 and today. This is no time for short memories.

At best, the Fed has managed to create an illusion of prosperity, but it won’t last. And that should surprise no one who has followed the Fed’s activities over the past couple of years.

“Keeping interest rates artificially low.” “Pumping money into the economy.” “Speculative rallies.”

Any of this sound familiar to readers? It should, as other more-visible “prophets” (Faber, Rogers, Schiff, to name a few) are warning about such events now in 2013.

I leave you with this from Rosenberg’s Globe and Mail piece:

This is no time for short memories.

You can read Burton’s entire Rosenberg gold price call post on The Tell here.

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)

Sources:

Harvey, Jan. “More banks peel away from bullish consensus on gold.” Reuters. 5 Mar. 2013. (http://www.reuters.com/article/2013/03/05/gold-forecasts-idUSL6N0BXJ1620130305). 6 Mar. 2013.

Rosenberg, David. “Fed’s illusion of prosperity bound to vanish.” Globe and Mail. 8 Feb. 2011. (http://www.theglobeandmail.com/globe-investor/feds-illusion-of-prosperity-bound-to-vanish/article1899546/). 6 Mar. 2013.

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