We can expect more QE and when that doesn’t defeat deflation (driven by global over-indebtedness), further unorthodox measures will be taken (i.e. helicopter money) and eventually there will be a gold revaluation to $8,000/ozt.
So says Willem Middlekoop, an economist and author of the The Big Reset: The War on Gold and the Financial Endgame. In fact, he sees US$8,000 gold as not a likelihood, but a certainty.
He says we’re staring at the end of the current global monetary system as we’ve come to know it and, gold aside, what comes next could destroy everything in its wake.
What began in 2008…has morphed into something much worse. Instead of making banks accountable, policymakers did little to change the rules of the game. Instead of reining in credit, central banks went on another binge. Lo and behold, we find ourselves in the same place we were almost a decade ago.
Middlekoop doesn’t think the next crash will be as bad as the last one. He thinks it’ll be much worse…[and that] the fallout from the next disaster could make 2008 look like child’s play – and the beneficiary from this will be gold predicting that bullion prices could skyrocket by 700% an ounce…
For those glued to price movements, Middlekoop’s forecast might make your eyes bulge…but it’s not just gold investors that would benefit from gold at US$8,000. The interesting thing about all this is that central bankers would too. Here’s Middlekoop’s take on it, courtesy of an interview he gave recently:
‘By revaluing gold to a much higher level, to over $8000 an ounce, central bankers solve quite a lot of problems.
We know Plan A — the current financial system – will end soon, we can’t go on this way… so we need a monetary reset…[which] would help to restore the balance sheet of The Federal Reserve.
It always ends in inflation…certainly in 2016, we can expect more QE…and when that does not defeat deflation (driven by global over-indebtedness), further unorthodox measures will be taken (i.e. helicopter money)…and eventually a gold revaluation.’
That central banks can benefit from all this goes to show that, while investors can lose their fortune, the house always wins.
It’s also a cautionary tale for anyone who thinks gold prices will never climb above US$1,900 again. If Middlekoop is right, that could change — and soon.
[The original article as written by Mat Spasic (dailyreckoning.com.au) is presented here by the editorial team of munKNEE.com (Your Key to Making Money!) and the FREE Market Intelligence Report newsletter (see sample here – sign up in the top right corner) in an edited ([ ]) and abridged (…) format to provide you with a fast and easy read.]
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After two years of declines, many investors sold their gold holdings and vowed never to invest in gold again. However, in the fall of 1976, gold began an ascent that saw it rise 750%, peaking at $850 a troy ounce three years and four months later. After a 3-year correction, the same opportunity to buy low exists today, just as it did in 1976.
This is not a typical bull market. Gold is not rising in value, but instead, currencies are losing purchasing power against gold and, therefore, gold can rise as high as currencies can fall. Since currencies are falling because of increasing debt, gold can rise as high as government debt can grow. Based on official estimates, America’s debt is projected to reach $23 trillion in 2015 and, if its correlation with the price of gold remains the same, the indicated gold price would be $2,600 per ounce. However, if history is any example, it’s a safe bet that government expenditure estimates will be greatly exceeded, and [this] rising debt will cause the price of gold to rise to $10,000…over the next five years. (Let me explain further.] Words: 1767.