Egon and James Turk discuss why gold is the best way to preserve wealth for the long term and how we are living through very interesting times for the gold market. Central banks are debasing all major currencies and this will lead to much higher gold prices.
They discuss whether there are any other currencies that could serve as a safe haven, such as the Swiss franc. They come to the conclusion that all major currencies have abandoned hard money since the ’70s and that gold is the only good refuge left. They note how a high CHF hurts Switzerland’s competitiveness.
Egon explains to James why even in a world financial crisis, Swiss tradition of gold ownership and gold saving mean that Switzerland is one of the safest places in the world to keep your gold. They comment on confiscation and taxation issues and risks.
They talk about the massive financial problems in the world, from the EU to the USA. They comment on the hardships of Portugal, Spain, Italy and France. UK is, after the US, the most likely candidate for hyperinflation. Egon claims that this process is starting now, with the dollar’s fall acting as the trigger. As Voltaire said “paper money eventually reaches its intrinsic value, which is zero”.
They talk about how savers and investors are fooled by nominal prices and fail to see how their savings have lost value massively in the last decade. In terms of gold the US dollar and even the Dow have lost value since the ’70s. They comment how easy it is to lose sight of how inflation and debasement eat away at purchasing power and savings, and how the US Dollar could lose the confidence of the market and stop being the reserve currency of the world. They talk about China’s role in the world economy and Chinese plans for global monetary reform.
James asks Egon what his target for the future gold price is, he repeats his 8000$ per ounce by 2013-15 prediction. Egon’s target was 6-12 thousand $/oz, however they both think that in view of current developments their previous estimates could be too conservative. They talk about hyperinflation and monetary crisis as a result of money printing. They discuss the coming monetary crisis and the importance of holding gold outside the banking system. They remark that the gold price is rising despite the fact that only 1% of world financial assets are in precious metals and that when the rush by fund managers to buy gold starts prices will go parabolic.