Wednesday , 21 February 2024

A Gold Mania Is NOT Imminent – But It IS Inevitable (+3K Views)

…[While] governments have consistently damaged their economies evergold rise further, the house of cards, however shaky, is still standing...If and when the markets crash and currencies collapse, however, there will be a dramatic rise in the price of gold. Here’s why.

The U.S. Dollar & Gold Relationship

Understanding gold’s real value would be easier if Americans regarded the dollar as “rising against gold” instead of “gold declining against the dollar.” This may seem like hair-splitting, but in fact, the dollar is concurrently rising against most of the world’s currencies. The currencies of most countries are, in fact, declining against gold.

[Although] the U.S. dollar is [currently] looking good worldwide…U.S. debt has placed it in a precarious position from which it will most certainly fall. As billionaire investor Jim Rogers has repeatedly stated, “I’m long on the dollar, but I hope I’m smart enough to get out in time.” Recently, he added, “If gold goes under $1,000, I hope I’m smart enough to step up and buy more gold — maybe even a lot of gold.”

The dollar is not a truly strong currency but, rather, “the best looking horse in the glue factory.” It will be the last to go, but it will indeed go. We may have a bit of time before that happens (whether it’s measured in months or years we can’t be certain) but right now (and especially if the dollar rises further against gold), gold is a bargain. It has either reached its bottom, or will do so in the foreseeable future. Any significant drop would be a sign to back up the truck and load up, as its eventual rise is inevitable. These are, in fact, the good old days, a time when gold is comparatively cheap…

The dollar promises to remain high as long as the yen and the euro hold out but, should they fall, the dollar will be exposed… There are many, many possible triggers that will cause the dollar to tank and, surely, one of them will occur, we just don’t know which one, or, more importantly, when. [For example,]

  • the Chinese could start selling their U.S. debt back into the U.S. market in a bigger way, or
  • the EU might default on its debt, or
  • the inflation caused by QE could create commodity price spikes.

Of one thing we can be reasonably certain. If the dollar starts to head south, we will see a flood of people seeking to buy gold in an effort to preserve their wealth. However, as all the punters have already been driven out of the market and only the long-termers remain, potential buyers will find themselves making higher and higher offers, as sellers will be almost non-existent.

With any investment, when panic buying sets in, the sky is the limit. We shall therefore see a gold mania. Most economists predict a figure in the $5000-$8000 range, but other estimates go far higher. A gold mania is not imminent, but I believe it is inevitable.

[The above article*, written by Geoffrey Caveney, originally appeared on and is presented by the editorial team of (Your Key to Making Money!) and the FREE Market Intelligence Report newsletter (see sample here) in a slightly edited ([ ]) and abridged (…) format to provide a fast and easy read.]

* (© 2015 Casey Research, LLC.)

Related Articles from the munKnee Vault:

  1. The U.S. Dollar May Have Topped & Gold Bottomed – Here’s Why

    Virtually everyone has become convinced that the dollar is going to 110, 120 or even 160. Folks when everyone is thinking the same thing … then no one is thinking. Here’s the thing. Almost no one is prepared for the dollar to drop. Everyone is convinced the dollar is going higher, and everyone is positioned long. Everyone is on the same side of the boat. When that happens invariably the boat tips over so here’s what I think is going to happen.

  2. Today’s Financial Entertainment: Gold Going to $10,000; Silver to $500! Here’s Why

    The consequences of the total economic mismanagement by world governments and central banks for the last hundred years will eventually result in my forecast of $10,000 gold and $500 silver being fulfilled.

    3. Gold – Is It A Commodity, A Currency, Neither or Both?

    To answer the question “what drives the prices of gold” we have to determine the nature of gold. Is it a commodity, a currency, neither or both? This article does just that. Read on.

    4. 42 Specific Gold Price Forecasts by Year & Analyst

    Over the years only 42 pundits have been bold enough to provide a specific date as to when their forecast for the future price of gold (and silver, in some cases) would be realized. This article provides that information along with the criteria & rationale for their determinations.

    6. Here’s Why the U.S. Dollar Is Going Through the Roof

    When markets expect that U.S. interest rates will be hiked, it typically strengthens the dollar because people rush to change other currencies into dollars where they can make more money and this higher demand for the USD drives its value up.

    7. 3 Reasons To Expect An Even Stronger U.S. Dollar

    Where will the dollar go from here? My answer: Though currency market volatility is likely to continue, I still see a stronger dollar over the longer term. Here’s why:

    8. Gold’s Price Is Mostly Affected By These Macroeconomic Factors

    For relevant analysis of gold prices, the so-called “fundamentals” provide scant help. What is required is an understanding of the macroeconomic drivers at play. This article addresses 9 such factors.