05/08/09 Tampa Bay, Florida “Gold Isn’t Going To $2,000 An Ounce” is both the headline and the announcement of Jeff Clark at CaseyResearch.com, a conclusion he apparently reached after he “decided to take a fresh look at calculations that could be used to appraise gold’s upside potential.”
Confirming rumors that I am “always disagreeable,” I am absolutely sure that gold will soar in price, as in To The Freaking Moon (TTFM), as a result of the fiscal and monetary malfeasance as we see today, as that is what has ALWAYS happened in the last 4,500 years of governments acting like grubby, corrupt morons, particularly when using a fiat currency, which always expands too, too much and for too, too long.
Naturally, being paranoid and argumentative, I figure that Mr. Clark is trying to pick a fight with me, just like all the other people in the world who are out to get me, each more jealous than the last, seething with their poisonous, hate-filled envy because I am smart enough to buy gold and they are stupid because they are not, even though I tell them all the time, “Just buy gold when your government is acting so stupidly, and then you will be acting smart, stupid!”
But, alas, they don’t. (And just between you and me, that’s how I know that they are stupid! Hahaha!)
In response to this challenge, I shout to my secretary, “Sarah, get Jeff Clark on the phone immediately, damn it!”
While I wait and fume for her to make the call, I read further into the essay, only to discover to my horror that he was NOT trying to argue with me! Oops!
Instantly, I shout out, “Sarah! Forget about making the call!” which was met with complete silence instead of her usual response of, “Okay” with the undertone of surliness and contempt which I figure she obviously uses to disguise the fact that she is Hot For The Mogambo (HFTM).
It was only then – Silly me! Hahaha! The joke’s on me! – that I remembered that I no longer had a secretary since she, too, quit, storming out of here screaming about what a creep I am and threatening to sue me and the company for her anguish.
Anyway, it turns out that the reason for the title “Gold Isn’t Going To $2,000 An Ounce” is that it will be higher than that, and he calculates a possible $6,214 per ounce price for gold if it replicates “Gold’s Percentage Rise in the Last Bull Market.”
When comparing “U.S. Gold Holdings to Money Supply,” he calculates gold selling for $5,468.80 per ounce, and the venerable Gold/Dow Ratio yields $4,000/oz.
It gets interesting when he looks at “All the Money in the World vs. Gold Reserves,” where we learn the novel factoid that “Total central banks reserves (including gold holdings) = $4.8 trillion,” which includes not only a lot of each other’s fiat money, but 929.6 million ounces of gold, which is the “total gold reserves held by all official institutions that issue currency.”
When dividing one into the other, “gold would be $5,246 per ounce.”
Then it starts getting weird, as when he compares “U.S. Gold Holdings to U.S. Foreign Trade Deficit,” based on “the cumulative trade deficit of $9.13 trillion (up from $6 trillion since June ‘07!)” compared to the entire U.S. gold holdings of 286.9 million ounces, “the corresponding price of gold would be $31,822 per ounce.”
Since “Official U.S. government liabilities now ring in at an incredible $55.2 trillion,” to pay it off right now “would require a $192,401 gold price.”
In short, by not doing any real work whatsoever other than to mindlessly quote Jeff Clark’s calculations, I have fulfilled my mission to give you one more set of reasons to buy gold as protection against the sheer tonnage of stupidity of the government and the Federal Reserve, and to give myself a new set of reasons to laugh at you and call you disrespectful names if you don’t buy gold after being told about it, which is the part that I like best! Hahahaha!
And, whee! This investing stuff is easy!
Sign Up for The Daily Reckoning e-letter and receive a copy of Bill Bonner's The Trade of The Decade report… at NO CHARGE.
We Value Your Privacy.
ShareThis
In fact, I beg the pardon of the mighty Mogambo to disagree. I think Silver will outperform gold.
Did I mention that there is LESS Silver Than Gold On The Face Of The Freaking Planet Earth (LSTGOTFOTFPE)?
And that, Unlike Gold, Silver Has Extensive Industrial Use (UGSHEIU)?
That CONSUMES IT, because Perfect Recycling Is A Freaking Dream (PRIAFD)?
Anyway, the first argument, namely LSTGOTFOTFPE, should suffice to anyone with half a brain.
We all know you own gold and maybe a lot of it and have no reservations to being a major cheerleader for gold. Such blatant greed is hard to hide and what difference does it makes. Given the herd mentality in the US I am certain you will work wonders with the price of gold and how high it will go. Nothing like a barbecued gold bar for dinner.
Bors, you should realize that unlike other economic advisors, The Mogambo puts his investment money where his mouth is (he buys what he preaches.)
Many other financial advisors push financial investments that they themselves do not own or have sold/plan on selling via a pump and dump.
The Mogambo has mentioned that the time will someday come to sell gold for extraordianary profits when high inflation, bordering on hyperinflation, is the norm.
Unlike most goldbugs, The Mogambo knows there will be a time to trade gold for the new currency (hopefully one backed by gold) all the while gold has acted as the best form of money-a money that Held Its Value, which is what money is supposed to do, not lose its value over time like Fiat.
Junior Mogambo Ranger Counter Arguement:
Google Edible Gold Leaf
or
Edible gold leaves
This should be the snappy comeback to those who try to claim that gold can’t be eaten.
(Though I prefer to exchange gold for food instead of treating gold as food.)
It is of course interesting to know that gold and silver can be used as food if need be (after it has been properly prepared, turned into leaf or foil.)
Hmmm. Eating gold… yum. How about you take a dump and make a map?!…
Now when you are talking about actually, truly preserving your labor against a soft, and I mean literally soft as in you make-up-the-rules-as-you-do-what-yur-foresight-of-a-mole-fiat-printing-FOOLISHNESS-wants currency worshipping society… then sure… don’t buy gold. You’re only disrupting my immediate physical supply, chump.
Silver too, babycakes.
How’s that real estate/bond/stock/money market treating you, CHUMP?
Hah! You guys are all chumps. Everybody knows the Great One doesn’t have anything. He squanders all regularly on salted snack foods, alcohol, pornography and tobacco products. True, he talks a good book, it’s just that he has also eaten every single page of his book.
Why else would he spend all that time in his bunker? Hey! Wanna really yank his chain? Next time he’s spotted hastily retreated to his bunker (due to some perceived threat, probably from his wife for squandering his gold, silver and oil), spray paint the periscope lens as he raises it to take a peek around the neighborhood. It’s great fun.
ok: a series of interesting appraisal systems. but how have they actually historically performed? can we quantify their performance?
should tomorrow morning we wake up and everyone has done the buying and selling necessary to realize any of these gold prices, that would be fantastic! but none of them seem feasible to me, except over long periods of time, and in situations where people buy nothing but gold!
how long?! and no food?!
let there be a future-of-gold function, F(i), where i is the set of inputs from today’s market. F calculates a potential price of gold; an appraisal of the upside. for every calendar day in history, T, compute F (you’ll need a history of all of the i’s)!
if the output from F is a price that gold HAS reached on date D, then subtract the dates (D-T), to see how long it took, L. plot the data point . if it HASN’T ever made it there, then that’s what we scientists call not-even-wrong! which is ok! you just don’t plot it.
now use the NEXT indicator and call it F’, do the same thing, plot . in fact, plot them all together in a 3d chart (those look sexy).
so, if the gold/dow ratio is so venerable, then it should set the standard for how big your L should be! you can design new F’s with it! and if they don’t actually come up with T’s and L’s at all, then they’re probably not even at this party!
whee! this econometrics stuff is easy!
Fractal analysis of asset valuation saturation curves which predicted the exact 19 July 2007 lower high and the millennium 11 October 2007 Wilshire high indicates a major devaluation of gold, commodities, and equities over the next three weeks.
Debt dependent deflation is coming.
(Uranium is arguably the most politically useful metal.)