Dollar Collapse, Future for GOLD PRICE, US DEBT

May 10, 2015 in Gold and Silver, News, Video by RBN Staff

Source: YouTube
Eugene Wilson
Published on May 2, 2015 

Jim Sinclair’s $50,000 gold call – let’s hope it doesn’t happen

Source: Mineweb
Lawrence Williams | 4 November 2013 12:41

Jim Sinclair who has a tremendous following within the gold investment community, has predicted in an interview that gold will reach $50,000, but this envisages currency collapse and hyperinflation.

UPDATE: No Chinese banks in new London Gold Fixing system – yet

But before writing Sinclair off as delusional in his views, one should be aware that he has made similarly over-the-top sounding calls on gold in the past – and been proven correct!  That’s a little scary.

And, while the $50,000 call might sound a little extreme, his short to medium term forecasts are more conservative and worth considering. Sinclair is an avowed poacher turned gamekeeper as far as precious metals are concerned, having been a major precious metals trader and broker back in the 1970s.

But, since then, he has both worked on the side of the regulators in trying to unwind the Hunt Brothers silver market positions back in the early 1980s, and later setting up his own company and is still hoping to bring a gold mine on stream in Tanzania.  He also remains one of the most followed gold sector proponents out there – sometimes known as Mr Gold – with his reputation earned from his accurate predictions of what happened to the gold price in the past.

 

His current shorter term predictions are that gold will hit $1650 this year, rise to $2400, fall back and then move up to between $3200 and $3500 by the end of 2016.  However, he also sees unprecedented manipulation of prices in the precious metals markets which has been distorting the figures, with huge amounts of paper gold so far being successful in keeping the gold price down.

But he does see this coming to an end.  He also suspects that at some time many Western governments will follow the Cyprus solution to bail out the banking system, which he sees as extremely precarious, by effectively confiscating savers’ cash held by the banks and that holding gold, while avoiding the traditional banking system, would be a wise move towards protecting one’s wealth..

Unlike many of the pro-gold commentators, Sinclair has not demonised Ben Bernanke and the implementation of QE, instead, praising him for his success in warding off what would have been a major depression.

However,  the inevitable result in any case will likely be the necessity to continue the programme indefinitely – QE to infinity is the phrase he coined and still uses at frequent intervals.  But at some stage, perhaps as soon as the end of the decade, he sees the whole house of cards crashing down regardless.

But where does the $50,000 gold prediction come from.  Towards the end of the decade, Sinclair sees a ‘great reset’ as physical gold becomes emancipated from paper gold.  We assume this will be exacerbated too by the recent flight of gold from West to East, leaving Western inventories of physical metal depleted, while Eastern demand continues to soak up all new supplies.

But, most of all, he foresees a collapse in value of currencies with debt continuing to soar and thus debilitating currencies.  This would be hyperinflation by any other name with precious metals providing the only stable wealth protector.

In effect he sees this as devastating the U.S. economy in particular – it wouldn’t necessarily be a totally global phenomenon, although many other economies would certainly suffer in parallel, and with gold priced in dollars the yellow metal’s value would soar in dollar terms, if not necessarily in all other currencies.

While ‘tapering’ may be implemented – indeed it perhaps needs to be to maintain any kind of  U.S. economic credibility – this doesn’t necessarily mean the end of QE, just a reduction in the monthly bond purchasing.

Even so this could have a debilitating effect on the U.S. stock market as the investment sector perhaps sees the end of easy Fed-provided money ahead.  This will likely impact gold too – initially.  But it will likely recover quickly and maybe go on to ever higher things.

But perhaps $50,000 gold is too high to contemplate – at least within the timescale implied by Sinclair.  Perhaps it could happen and he will be proved right again, but if it does it also implies that the U.S. economy and currency, and perhaps that of much of the Western world, will have collapsed at a catastrophic pace which will be devastating for much of the population.

Perhaps one should pray that this time Jim Sinclair is proved wrong.  He has not always been correct in his short to medium term gold price predictions.  Let’s hope he’s wrong with this long term one, but don’t bank on it.

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