Gold ‘Will Go To $3,000/oz’ – David Rosenberg

[mamboni]

Gold ‘Will Go To $3,000/oz’ – David Rosenberg


Highly respected economist and strategist David Rosenberg has told that Financial Times in a video interview (see below) that gold “will go to $3,000 per ounce before this cycle is over.”

Markets are repeating the downturns of 2010 and 2011 and it is time to search for safety, David Rosenberg of Gluskin Sheff tells James Mackintosh, the FT Investment Editor.

Rosenberg sees a “very good opportunity in gold” as it has corrected and seems to be “off the radar screen right now”.

He sees gold as a currency and says the best way to value gold is in terms of money supply and “currency in circulation.”

As the “volume of dollars is going up as we get more quantitative easing” he sees gold at $3,000 per ounce.

Mackintosh says that Rosenberg’s view is a “pretty bearish view”.
To which Rosenberg responds that it is “bullish view on gold and gold mining stocks.” Mackintosh says that it is “bearish on everything else”.

Rosenberg says that it is not about being “bullish or bearish,” it is about “stating how you view the world” and he warns that the major central banks are all going to print more money and keep real interest rates negative “as far as the eye can see.”

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This is “critical” as one of the key determinants of the gold price are real short term interest rates.

The longer they stay negative “the longer the bull market in gold is going to be.”
Rosenberg sums up that “this is not about being bullish or bearish, it is about how do we make money for our clients.”

The interesting interview can be watched here.

[beefsteak]

Mamboni,

you've amply illustrated that once again, if one needs non-zeno viewpoints/interviews, truth seekers have to leave "our shores." Thanks for the post.


beefsteak

[Silver Rocket Bitches!]

Gold at $3000 an oz will essentially mean paying $10 for a lb of bacon and probably $6-7 for a gallon of gas.

[Neuro]

Gold at $3000 an oz will essentially mean paying $10 for a lb of bacon and probably $6-7 for a gallon of gas.

300 lbs of bacon is a substantial amount though!

[mamboni]

Gold at $3000 an oz will essentially mean paying $10 for a lb of bacon and probably $6-7 for a gallon of gas.

The way things are going, those prices seem not only inevitable but not too far off.

[kiffertom]

arent we in a deflationary collapse? they cant print enough money to replace what is disappearing can they? i know prices are going up on almost everything but with all the derivatives blowing up wont it all collapse?

[ximmy]

The way things are going, those prices seem not only inevitable but not too far off.

Folks will have to make due with little bacon & gas...

[mamboni]

arent we in a deflationary collapse? they cant print enough money to replace what is disappearing can they? i know prices are going up on almost everything but with all the derivatives blowing up wont it all collapse?

That's the crux of the inflation versus deflation argument. Picture the assets as a giant tall house of cards buttressed by derivatives such as CDS and interest rate swaps. These have enabled the building of houses of cards on top of eachother. This structure is oversized, unstable and sitting atop a foundation of sand. When it starts to topple it will come down cataclysmically like dominos falling. Asset prices will be destroyed. The central banks will bankrupted as their balance sheets will be vaporized. But what is unclear is what will happen to cash in circulation. It may retain it's value and even increase in value as the people demand a medium of exchange that will be in short supply chasing debt service. We are seeing this behaviour at low levels now. The central banks may emit massive amounts of fiat money/credit to the banks to shore up their balance sheets and deleverage them fast enough to prevent outright collapse. That is what is happening now. If they are successful, the banks will be recapitalized and begin to lend again, starting a new cycle of credit expansion and asset price inflation. The general price level will be much higher than today. That's when gold and silver prices will hit maximum, say $5000 and $100 respectivley. That's when you want to convert your gold and silver to fiat/credit money to ride the new wave of economic spring, probably circa 2016.

Of course, this is only a guess on my part.

[Goatman]

That would indicate silver at $60 an ounce at 50:1.