Published: November 17, 2010
Back in the late 1990s, there was a raft of books calling for the Dow to reach 30,000 or even 100,000. Looking back on it, it seems crazy. But such things are natural during bull markets. Interestingly enough, book titles can be an indicator that a bubble is about to burst.
When it comes to gold, we are starting to see something similar. For example, a recent book called Hard Money makes the bold prediction that gold will eventually hit $10,000 per ounce. It's inevitable that we will see other titles hit the market soon.
But in the case of Hard Money, the author is not a crackpot. He actually manages the GBI Gold Fund and is the head of Global Research at the Teacher Retirement System of Texas. He even convinced the pension fund to take a major stake in gold in 2007.
True, there are many top-notch analysts who have made bad calls. Not many saw the collapse of 2008, right? But in the case of gold, there are certainly strong arguments why the price can go higher. However, there will need to be some key drivers.
When it comes to gold, we are starting to see something similar. For example, a recent book called Hard Money makes the bold prediction that gold will eventually hit $10,000 per ounce. It's inevitable that we will see other titles hit the market soon.
But in the case of Hard Money, the author is not a crackpot. He actually manages the GBI Gold Fund and is the head of Global Research at the Teacher Retirement System of Texas. He even convinced the pension fund to take a major stake in gold in 2007.
True, there are many top-notch analysts who have made bad calls. Not many saw the collapse of 2008, right? But in the case of gold, there are certainly strong arguments why the price can go higher. However, there will need to be some key drivers.
One factor is that the global economy will need to remain volatile. Unfortunately, this seems to be likely. With the latest round of quantitative easing from the Federal Reserve, the printing of dollars continues at an alarming rate as the budget deficit continues to expand.
The debt explosion is not just in the United States, but also in Japan and Europe. The problem is that it becomes nearly impossible to pay off these debts with onerous tax hikes. In its place, governments will instead rev up the printing presses and monetize the debt.
The upshot is inflation. This is what happened to the world economy during the 1970s, in which gold spiked 23 times its value.
The debt explosion is not just in the United States, but also in Japan and Europe. The problem is that it becomes nearly impossible to pay off these debts with onerous tax hikes. In its place, governments will instead rev up the printing presses and monetize the debt.
The upshot is inflation. This is what happened to the world economy during the 1970s, in which gold spiked 23 times its value.
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Source: http://www.topstockanalysts.com/cmnts/2010/11-17-10-tt-gold.asp?utm_source=+NL-TopStockAn&utm_medium=EMAIL&utm_campaign=TopStockAnalysts.com_TSA_Digest_--_11-17-1011/17/2010
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