Citigroup says gold could rise above $2,000 next year as world unravels

November 26, 2008 by · Leave a Comment
Filed under: Commodities News 

Well we have seen a tremendous amount of money issuing taking place to try to save a reckless financial system in the United States .  At some point this amount of currency will have to come to bear in the real market.  People are calling for deflation everyday and to a point this is correct because of the huge gaping hole that has been blown into the credit markets from de-leveraging.  

But once we do find a bottom, this massive amount of money will go into the market and you will see prices driven through the roof.  Also because we rely on foreign creditors to buy our debt to issue our currency, we could see them lose confidence in our dollar and then we will see them jump away from the dollar and it would crash and that would drive prices up for Americans because we import much of our goods.  They would price up their import goods because we have been so reckless in issuing our currency to bail out failing institutions that should of failed….period.  Gold is money, not credit and it does not owe to anyone.

News:

The bank said the damage caused by the financial excesses of the last quarter century was forcing the world’s authorities to take steps that had never been tried before.

This gamble was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold.

“They are throwing the kitchen sink at this,” said Tom Fitzpatrick, the bank’s chief technical strategist.

“The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed though into an inflation shock.

Source: Telegraph

 

 

 

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