madfranks
26th April 2012, 11:34 AM
http://news.goldseek.com/GoldSeek/1335445200.php
Gold Standard Inevitable, Possibly Within Year - $10,000/oz Looms
Reuters TV have interviewed John Butler who says a return to the gold standard is "inevitable" possibly as soon as within the year and $10,000/oz gold is on the cards.
Jamie McGeever interviews Butler in the Goldsmith Hall in London about his opinions propounded in his new book, ‘The Golden Revolution : How to Prepare for the Coming Gold Standard.’
Butler has 18 years’ experience in the global financial industry, having worked for European and US investment banks in London, New York and Germany.
The book says that the era of paper currency is coming to an end and a return to a gold backed dollar is basically inevitable.
McGeever starts the interview by saying that far from gold being expensive at $2,000/oz, gold may be “the bargain of a life time” especially “if the world returns to some form of gold standard.”
Butler says that this “could happen as early as next year” due to BRIC nations dissatisfaction with the dollar reserve standard, “they will start to move formally back to gold”.
There are many ways that this can happen according to Butler including one country becoming a first mover, surprising the world and the United States, by pegging its currency to gold
He points out that Russia may be the country who could do precisely that.
This could lead to a run on the US dollar and financial assets and could see the dollar lose 20% in 24 hours as investors pour into real assets such as oil and gold. This could lead to a depression in the U.S.
There could be a Bretton Woods style “crisis meeting” where the U.S. decides it must reinstate the gold standard or else the dollar “may lose its reserve status entirely.”
Gold at $5,000/oz should happen and possibly over $10,000/oz in that scenario as gold will be a “de facto monetary asset in cross border balance of payments transactions”.
Reuters’ McGeever acknowledges how the “gold market is tiny” compared to “trillions and trillions of dollars worth of cash and assets sloshing around the world financial system.” He asks how can countries back “all of that” against such a “tiny and finite amount of gold?”
Butler responds by saying that “the amount of gold is finite by weight or volume, it is not finite by price.”
If gold is going to be remonetised it is entirely reasonable that “gold’s price will rise by an order of magnitude.”
Butler correctly points out that if gold were to rise to over $10,000/oz then in fact what you would have is a market capitalisation of gold, as it were, vis-à-vis the money supply and credit volume generally which is in line with a longer term comparison – it implies stability.
Gold Standard Inevitable, Possibly Within Year - $10,000/oz Looms
Reuters TV have interviewed John Butler who says a return to the gold standard is "inevitable" possibly as soon as within the year and $10,000/oz gold is on the cards.
Jamie McGeever interviews Butler in the Goldsmith Hall in London about his opinions propounded in his new book, ‘The Golden Revolution : How to Prepare for the Coming Gold Standard.’
Butler has 18 years’ experience in the global financial industry, having worked for European and US investment banks in London, New York and Germany.
The book says that the era of paper currency is coming to an end and a return to a gold backed dollar is basically inevitable.
McGeever starts the interview by saying that far from gold being expensive at $2,000/oz, gold may be “the bargain of a life time” especially “if the world returns to some form of gold standard.”
Butler says that this “could happen as early as next year” due to BRIC nations dissatisfaction with the dollar reserve standard, “they will start to move formally back to gold”.
There are many ways that this can happen according to Butler including one country becoming a first mover, surprising the world and the United States, by pegging its currency to gold
He points out that Russia may be the country who could do precisely that.
This could lead to a run on the US dollar and financial assets and could see the dollar lose 20% in 24 hours as investors pour into real assets such as oil and gold. This could lead to a depression in the U.S.
There could be a Bretton Woods style “crisis meeting” where the U.S. decides it must reinstate the gold standard or else the dollar “may lose its reserve status entirely.”
Gold at $5,000/oz should happen and possibly over $10,000/oz in that scenario as gold will be a “de facto monetary asset in cross border balance of payments transactions”.
Reuters’ McGeever acknowledges how the “gold market is tiny” compared to “trillions and trillions of dollars worth of cash and assets sloshing around the world financial system.” He asks how can countries back “all of that” against such a “tiny and finite amount of gold?”
Butler responds by saying that “the amount of gold is finite by weight or volume, it is not finite by price.”
If gold is going to be remonetised it is entirely reasonable that “gold’s price will rise by an order of magnitude.”
Butler correctly points out that if gold were to rise to over $10,000/oz then in fact what you would have is a market capitalisation of gold, as it were, vis-à-vis the money supply and credit volume generally which is in line with a longer term comparison – it implies stability.