Doug Casey On Why Gold Could Go “Hyperbolic”

• Doug Casey On Why Gold Could Go “Hyperbolic”
  by https://www.caseyresearch.com/
  …. Doug: Keeping dollars in banks is very dangerous. The whole world is like Cyprus a few years ago. You don’t actually own anything in a bank or broker anymore—your assets are the unsecured liability of an institution that’s likely bankrupt. This is especially true if you have more than $250,000 in any given account, which the FDIC insures. But it’s bankrupt too, with assets that cover like a half percent of their liabilities.
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  The problem is systemic risk, and it’s worldwide. It’s like Joe Louis said: you can run but you can’t hide. The only place you can hide today is gold and silver. That, and cheap real estate, if you can find it.
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  Justin: Yeah, gold is doing quite well. Its price is up 12% since July.
  What do you attribute this to? Is it because investors are taking shelter? Is it due to the weak dollar? Or is it simply because we’re in the early innings of a new commodity bull market?
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  Doug: Well, I think all the indications are aligning at this point. It’s been a rough bear market. As a group, commodities are 50% below their 2011 highs. It’s been a deep bear market as well as a long bear market. As a result, commodities have never been cheaper relative to financial assets like stocks and bonds.
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  It’s a great time to be in commodities. And gold is the foremost commodity. It’s historically been used as money. And it will continue to be used as money because none of these governments should, or do, trust each other. Or each other’s phony paper fiat currencies.
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  There could be a buying panic in gold and it could go much higher. We’re in a new bull market for gold at this point, but nobody cares. Or even knows that’s true. The same is true for silver. Although, silver is primarily an industrial commodity. It’s the poor man’s gold for many reasons.
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  Justin: How much higher could gold head?
  Doug: Well, these things usually move in a hyperbolic curve. They start out slowly. Then, they accelerate. Same type of thing we saw with cryptocurrencies.
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  I think gold will do the same, although not to the same extent. My prediction by the end of this year is that gold will hit $2,000. In 2019, $3,000. In 2020, $4,000. By the time this bull market peaks, gold could reach $10,000. But I hate to say things like that…because it sounds so outrageous.
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  But look at the number of dollars in existence ($3.635 trillion in the M-1 money). Divide that by the 260 million ounces of gold the U.S. Government is supposed to own, and you get a gold price of $13,982/ounce.
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  Look at the number of dollars that are outside the U.S.—$10 trillion, $20 trillion, who knows?—and that liability is growing by $50 billion annually with the balance of trade deficit.
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  At $1,300 per ounce, the U.S. gold holdings can’t even cover a year’s deficit. And consider the fact that at some point those dollars will need to be redeemed by something if they’re going to retain any value.
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  The price of gold—if gold is going to be fixed to the dollar again, at least for the purpose of trading with foreigners, with foreign governments—is going to have to be much higher than it is today. Of course, I don’t think the dollar should exist, nor should the U.S. government even be in the money business; it just confuses the issue.
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  Money is a medium of exchange and a store of value—it shouldn’t also be a political football, and a means for the State to finance itself. Gold itself should be used as money. Remember that the dollar—like the franc, the pound, the mark, and what-have-you—were just names for a specific quantity of gold.
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  So a six-to-one shot from here is not at all unreasonable over the next several years. And that would mean very good things for gold stocks.
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