gold standard

Jim Rickards Gold Forecast: ‘My Intermediate Target Is $10,000 An Ounce’

James (Jim) Rickards, an American lawyer, economist, investment banker, and best-selling author, was interviewed by Kitco News anchor Daniela Cambone at the Silver & Gold Summit in San Francisco this past week. Rickards, who penned the USA Today and Wall Street Journal business best-seller The New Case for Gold last year, offered up the following forecast for the price of an ounce of gold. From the interview:

CAMBONE: Last time you were on Jim you made a lot of headlines with your forecast. You don’t think $10,000 gold is out of the question. People raised a lot of eyebrows. But they don’t raise eyebrows with $50,000 Bitcoin calls now. Does that surprise you?
RICKARDS: Well, I’ll leave Bitcoin out of this. But here at the Silver & Gold show, and this morning in my presentation, I went through the $10,000 gold. It’s not a made-up number. I don’t do it to get headlines or attract attention. It’s actually the price that gold would have to be to avoid deflation. If you had a gold standard, or even if you were using gold as a reference in some kind of indirect gold standard, you have to get the price right given the quantity of gold. So the implied, non-deflationary price of gold is about $10,000 an ounce, conservatively. There are other, if you change M1 to M2 and increase the backing, you get to $40 or $50,000 an ounce. I don’t have to go there. My intermediate target is $10,000 an ounce.


“A ‘Major’ Gold Rally Is Coming, Thanks To The Fed- Jim Rickards”
(gold discussion starts at 3:11)
YouTube Video

Earlier this year Rickards explained how he arrived at that $10,000 price for an ounce of gold. From a piece he authored on the Daily Reckoning website back on March 7:

There is a solid mathematical basis for $10,000 gold. It’s actually the implied non deflationary price of gold under a gold standard.

The combined M1 money supply in the world is about 24 trillion dollars. That includes the United States, China, the Eurozone and Japan. Those four entities combine for over 70% of global GDP.

Now, the official gold in the world is about 33,000 tons. That’s not counting private gold, because private gold is not part of the money supply.

So if you wanted to restore a gold standard, how much gold do you need to back up the money supply? My estimate is about 40%.

Historically, central banks have run successful gold standards with less backing. In the 19th century, for example, the Bank of England only had about 20% gold backing. In most of the 20th century, the U.S. had 40% gold backing.

I use the higher number, 40%, because I think a higher number might be needed to restore confidence in event of a collapse. The point is, 40% is a debatable, but reasonable figure.

Many people say there’s not enough gold to support the money supply. That’s one of the objections to gold standard. But my answer is that’s nonsense. There’s always enough gold to support the money supply. It’s a question of price.

Now, if you back 40% of the $24 trillion of money supply with the amount of official gold, it implies a gold price around $9,000 an ounce. But I predict $10,000.

So how do I arrive at $10,000 an ounce?

That’s because I expect central banks to print a lot more money by the time this issue comes to a head. So, by the time the printing presses stop running around the world, that $9,000 number will likely be in the range of $10,000.

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

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. Christopher E. Hill, the creator/Editor of this blog, is 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 on the site.)

Source:

Rickards, James. “The Path to $10,000 Gold.” Daily Reckoning. 7 Mar. 2017. (https://dailyreckoning.com/path-10000-gold/). 24 Nov. 2017.

Share

Tags: , , , , , ,

Must-Read Marc Faber Interview

Regular readers of Survival And Prosperity know on Sundays I try and blog about the latest investment activities/recommendations of the “crash prophets”- Marc Faber, Jeremy Grantham, Jim Rogers, and Peter Schiff. This week, three of the “prophets” are sounding off. First up is Marc Faber. An interview of the Swiss-born investment advisor/money manager was published Friday on the website of MarcoPolis, a Paris-based international online publishing company. Johnnes Maierhofer and Peter Matay conducted one of the most comprehensive interviews of Dr. Faber I’ve ever come across, writing on MarcoPolis.net:

In this exclusive interview with Marcopolis.net Marc Faber covers it all: from commodities and China to the outlook on inflation, the Euro and gold. According to him the global economy is not healing. To the contrary, we might find ourselves back into recession within six months or a year. In that case he expects more money printing by central banks, which eventually could lead to high inflation rates and renewed strength in commodity prices.

On the bright side, he sees great economic potential in Vietnam. Also, the Iraqi stock market has good potential now that a deal with Iran has been reached. While mining stocks are extremely depressed we might see defaults before any meaningful recovery…

Followers of Faber know he’s been a gold bull for years now. The publisher of the monthly investment newsletter The Gloom Boom & Doom Report said this about the precious metal (and other investments of his) during the exchange:

I own gold and it doesn’t worry me that it went down because as I mentioned to you I have this diversification, the bonds in US dollars and the cash in US dollars has been a good investment essentially over the last twelve months. Then I own equities and I own properties in Asia that have been reasonably good investments so the fact that gold is going down doesn’t worry me and I buy every month a little bit but I think on this weakness I will increase the position substantially because I had maybe say 25% in gold but because equities and properties went up, the dollar went up and gold went down, the allocation to gold is no longer 25% but maybe only 10 or 15%.

So then I have to stock it up again. But I would say an individual should definitely own some physical gold…

“Doctor Doom” believes gold confiscation is a possibility, and added later in the discussion:

I think they will take the gold away and go back to some gold standard by revaluing the gold say from now 1000 dollars an oz. to say 10,000 dollars an oz…

A “must-read” interview for Faber followers, which you can access in its entirety on MarcoPolis.net here.

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

(Editor’s notes: Info added to “Crash Prophets” page; 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)

Share

Tags: , , , , , , , , , , , , , , , , , ,

Peter Schiff: Swiss ‘No’ Vote May Signal Gold’s Bottom, Return Of Bull Trend

“Swiss voters overwhelmingly rejected an initiative on Sunday that would have forced the country’s central bank to hold one-fifth of its assets in gold, a move that would have eroded its ability to conduct monetary policy.

Citing projections from results in 19 of the country’s 26 cantons, Swiss television said roughly 78% of voters opposed the initiative, dubbed ‘Save Our Swiss Gold.’ The gold initiative would have also barred the Swiss National Bank from selling gold in the future…”

The Wall Street Journal website, November 30, 2014

I hadn’t been paying too much attention to that Swiss vote on gold. But after the mainstream financial news outlets cheered the Swiss citizens rejecting the initiative, I thought this could rank right up there with the United Kingdom selling off half its gold reserves in 1999 when the precious metal was valued at only $300 an ounce- a 20-year low at the time.

In other words, a move the Swiss may very well come to regret in the coming years.

To each their own, I always say.

And Wednesday, the CEO of Euro Pacific Capital, Peter Schiff, shared his thoughts about Switzerland’s rejection of the yellow metal. From his December 3 SchiffGold “Gold Videocast” entry on YouTube.com:

I actually believe that the “no” vote- from the long-term perspective- is even more bullish for the price of gold than had Switzerland voted to back their currency with 20 percent gold…

Thinking about it from a historical perspective, if there’s a chance that we saw the lows for the entire gold move on Sunday night, it would be ironic, and then I think makes a lot of sense, that the Swiss “no” vote on adopting even a modified gold standard would mark the low point for gold. Just like you have the Bank of England dumping a bunch of gold at the lows, I mean, central banks or actions around central banks sometimes mark key points. And the fact that the Swiss said “no” to gold, “we don’t want it,” that may be the day that gold actually bottomed out and now we’re resuming the bull trend. Only time will tell whether that is the case. But again, if it’s not the absolute bottom, I think it’s close enough not to worry about it, and I think that people need to be buying the gold that the Swiss citizens just told their bank not to buy. And not only the gold, silver. Because if gold goes up, silver’s going up. So buy both metals.


“Gold Videocast: Swiss Franc No Longer a Safe Haven
and a Possible Bottom in Gold”
YouTube Video

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

(Editor’s notes: Info added to “Crash Prophets” page; 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.)

Share

Tags: , , , , , , , , , , ,

Latest On Proposed Swiss Gold Franc

Speaking of Switzerland and gold, have you heard about the efforts in that country to unveil a new gold-backed national coin? On May 23, Eleazar David Meléndez reported on IBTimes Gold, a gold news portal belonging to the International Business Times:

The Swiss parliament was scheduled to debate Tuesday the wisdom of creating a new gold-backed national coin that would float in parallel with the Swiss franc, becoming the first national legislature in decades to consider issuing a currency based on a commodity.

The proposal was first introduced in March 2011 by three right-wing legislators as part of what they termed a “healthy currency” initiative. It seeks to modify the Swiss constitution, instructing the nation’s central bank to issue a new national coin with a fixed gold content that would complement, though not replace, the Swiss franc.

(Editor’s note: Italics added for emphasis)

A good number of Americans still believe the Swiss franc is a gold-backed currency. However, as Meléndez pointed out:

Switzerland was one of the last countries to completely decouple the value of its currency from the gold standard, keeping a 40-percent gold reserve on the value of its money supply as late as 2000, when the Swiss franc was first fully floated.

Not finding the results of last month’s debate, I contacted the Swiss People’s Party (SVP), which is spearheading the gold-backed franc, for more information. I received the following e-mail from Thomas Widmer, General Secretariat of the SVP Switzerland, yesterday morning:

Dear Mr. Hill

Thank you for your interest regarding the idea of introducing a gold franc.

The proposition in form of a parliamentary initiative demands the creation of a set of gold coins that should be affordable for everybody.

Coins with a gold content of 0,1 grams would actually cost about 4.50 Swiss Francs, whereas coins with 1 gram gold would cost approximately 45 Swiss Francs.

The idea behind this project is to offer people a reliable alternative for savings.

Up until now, the parliamentary initiative was only treated in the Committee for Economic Affairs and Taxes of the National Council on 22. May 2012.

The majority of the commission decided with 17 against 7 votes (the 7 members of SVP in the commission), that the proposition is not supported by the commission.

This is a recommendation which can be followed or ignored by the National Council, where the issue will be treated next.

The political System of Switzerland is in many ways comparable to other political systems, such as the American system, for instance.

We as well have two chambers, the National Council and the Council of States.

Usually a political proposition is first treated in the responsible commission of one of the councils, for instance in the Committee for Economic Affairs and Taxes of the National Council.

In a second step, the proposition is voted upon in the council, in this case in the National Council.

If the commission of the first council and the plenary of the first commission both reject a proposition, the process comes to an early end.

If a proposition is supported by the commission and/or the first chamber, it is the commission of the other council which takes a decision, i.e. the Committee for Economic Affairs and Taxes of the Council of States.

Finally a proposition is treated as well by the second council, in that case the Council of States.

The Federal Assembly, however, is National Council and Council of States combined.

They only elect our government (the Federal Council and judges), apart from that they are seated separately.

http://www.parlament.ch/e/wahlen-abstimmungen/wahlen-im-parlament/pages/default.aspx (explanation in English)

So, after the rejection of the Commission, future doesn’t look too promising for the parliamentary initiative.

Yet, it depends on the vote in the National Council.

Given the fact that only SVP supports this initiative, it is highly unlikely that it will find a majority in the National Council.

For further information visit

http://www.parlament.ch/e/Pages/default.aspx
http://www.goldfranc.org/

Kind regards
Thomas Widmer

Freundliche Grüsse
Generalsekretariat der SVP Schweiz

Down, but not out, it appears. Regardless of what ultimately transpires in Switzerland’s National Council, I have a feeling history will be kind to the SVP’s attempt to reintroduce honest money. Because, as a number of Survival And Prosperity readers already know, the history of fiat money has always been one of failure.

Source:

Meléndez, Eleazar David. “Gold Standard Redux: Swiss Parliament Debates Creating ‘Gold Franc.’” IBTimes Gold. 23 May 2012. (http://www.ibtimes.com/articles/344361/20120523/gold-standard-swiss-franc.htm). 28 June 2012.

Share

Tags: , , , , , , , , , , , ,

Peter Schiff In Rebuttal Lecture To Fed Chair Ben Bernanke

You may have heard that Federal Reserve Chairman Ben Bernanke has been on the lecture trail lately, giving a series of four public lectures at George Washington University that some think is the U.S. central bank’s latest effort to counter negative public sentiment. Truth be told, I haven’t been really following it, but a cursory glance at some of what the Fed Chair’s been saying is “interesting,” to say the least:

I think the view is increasingly gaining acceptance that without the forceful policy response that stabilized the financial system in 2008 and early 2009, we could’ve had a much worse outcome in the economy

-March 27 lecture

There’s no consensus on this, but the evidence I’ve seen suggests that monetary policy did not play an important role in raising house prices during the upswing

-March 22 lecture

I think, though, that the gold standard would not be feasible for both practical reasons and policy reasons

-March 20 lecture

While surfing the Los Angeles Times website this morning, I came upon a piece that announced “crash prophet” and Euro Pacific Capital CEO Peter Schiff would be giving a rebuttal to Chairman Bernanke’s lectures later today. From a March 26 press release on the website of Washington, D.C.-based non-profit FreedomWorks:

WHAT: FreedomWorks Foundation and Reason will co-host a special lecture by renowned economist Peter Schiff as he responds to Federal Reserve Chairman Ben Bernanke’s four-part College Lecture Series at George Washington University School of Business.

WHEN: Thursday, March 29, 2012 at 3:00pm ET, lasting approximately one hour.

An opportunity for Q&A and a reception will follow the formal response.

WHERE: Reason’s DC Headquarters, 1747 Connecticut Avenue, NW, Washington, DC 20009.

The event will also be live-streamed from the FreedomWorks Facebook page, www.facebook.com/FreedomWorks.

WHY: While Chairman Bernanke explains to students how the Federal Reserve “saved the economy,” Peter Schiff will outline the ways in which the Federal Reserve contributed to the housing crisis and current economic recession in the first place.

The Federal Reserve bears significant responsibility for every financial crisis over the past century, including the Great Depression, stagflation in the 1970’s and most recently, the 2008 economic meltdown.

A 2011 audit of the Federal Reserve found $16 trillion in secret bailouts to corporations and banks around the world in less than three years. Documents released in the same year revealed foreign banks to be one of the largest recipients of Federal Reserve money during the 2008 economic downturn.

These secret deals, bailouts, and massive expansion of the Federal Reserve’s balance sheet were all overseen by Ben Bernanke, with almost no Congressional oversight.

You can RSVP to watch the streaming video on the FreedomWorks website here.

Share

Tags: , , , , , , , , , , ,

Peter Schiff Sees Disorderly U.S. Economic Collapse, Gold As Good Investment

While looking to update Survival And Prosperity’s growing “Crash Prophets” page (where the latest investment activities/recommendations of the “Crash Prophets”- Marc Faber, Jeremy Grantham, Jim Rogers, and Peter Schiff- are compiled) with new material this morning, I came across an interesting Peter Schiff piece on the International Business Times website today. Schiff, of Euro Pacific Capital/Euro Pacific Precious Metals-fame, interviewed James G. Rickards, Senior Managing Director at New York City-based Tangent Capital Partners LLC and Senior Managing Director for Market Intelligence at McLean, VA-based Omnis, Inc. Some highlights (provided by the IBT article):

• Both gentlemen agree that world is witnessing a “currency war”- competitive devaluation of currencies to steal export share.
• Schiff argues that the only way to win the game is not to play. Rickards says the euro is likely to come out strongest.
• Rickards draws attention to the International Economic Emergency Powers Act, a current US law that would give the US president authoritarian control of the economy in case of an extreme collapse. Schiff thinks such a disorderly collapse is on the horizon.
• Schiff thinks the US is unlikely to return to a gold standard in the near future, while Rickards thinks it is too effective a solution to be overlooked – even by Keynesians. Both are bullish on gold as an investment.
• Rickards was tapped to teach the Dept. of Defense how to wage war using monetary policy, but doesn’t think current US policies are meant to deliberately undermine foreign governments.
• Both gentlemen agree that the best solution continues to be allowing the economy to rapidly de-leverage without government intervention – and cite the forgotten 1920-21 Depression as supporting evidence.
• Schiff and Rickards disagree on which country holds the upper hand in the Chimerica relationship. Rickards thinks the US can simply freeze China’s accounts, while Schiff thinks China’s will still be left with a greater productive capacity.

(Editor’s notes: Italics added for emphasis; Info added to “Crash Prophets” page)

It’s definitely worth a read, and can be found on the International Business Times site here.

Share

Tags: , , , , , , ,

Going For The Gold Standard

Judge, I’m not in this to play. But to win. America needs a dollar as good as gold.

-Lewis Lehrman, former monetary policy advisor to the Reagan Administration, 1982 New York gubernatorial candidate, and chairman of The Lehrman Institute, a public policy research and grant making foundation founded in 1972, on the May 4 airing of the FOX Business show Freedom Watch with Judge Andrew Napolitano


“Gold Standard Now”
FOX Business Video Link

Share

Tags: , ,

Survival And Prosperity
Est. 2010, Chicagoland, USA
Christopher E. Hill, Editor

Successor to Boom2Bust.com
"The Most Hated Blog On Wall Street"
(Memorial Day Weekend 2007-2010)

Happy New Year

PLEASE RATE this blog HERE,
and PLEASE VOTE for the blog below:



Thank you very, very much!
Advertising Disclosure here.
ANY CHARACTER HERE
Emergency Foods Local vendor (Forest Park, IL). Review coming soon.
ANY CHARACTER HERE
Legacy Food Storage Review coming soon
ANY CHARACTER HERE
MyPatriotSupply.com reviewed HERE
ANY CHARACTER HERE
Buy Gold And Silver Coins BGASC reviewed HERE
ANY CHARACTER HERE
BulletSafe reviewed HERE
ANY CHARACTER HERE
BullionVault BullionVault.com reviewed HERE
ANY CHARACTER HERE
This project dedicated to St. Jude
Patron Saint of Desperate Situations

Categories

 

Archives