Monday , 4 March 2024

Gold Going to Parabolic Top of $10,000 by 2012 – For Good Reasons (+7K Views)

No wishful thinking here! As I see it gold is going to a parabolic top of $10,000 by 2012 for very good reasons – sovereign debt defaults, bankruptcies of “too big to fail” banks and other financial entities, currency inflation and devaluations – which will all contribute to rampant price inflation. Words: 1111

So says Arnold Bock  in an article edited by Lorimer Wilson, editor of  (It’s all about Money!), for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.

Bock goes on to say:

Not surprisingly, I have company in that view: Money manager, Peter Schiff, told Business Week recently that, “Gold could reach $5,000 to $10,000 per ounce in the next 5 to 10 years” and highly respected economist David Rosenberg is of the opinion that “There is no doubt that gold can easily double from here.”


1. History is No Guide
Gold has only been trading freely since President Nixon’s 1971 decision to deny gold to the French and others attempting to repatriate their paper dollars for the metal. As such, there has been a scant forty years of gold production and trading since it was detached from supporting paper money. This period has also been marked by substantially higher monetary and price inflation as well as currency devaluation.

2. Market Manipulation
The Commodity Futures Trading Commission (CFTC) held a major hearing in 2010 which blew the doors off bullion metals futures trading markets in terms of what was revealed publically. I predict this public hearing will be viewed in the period ahead as the precious metals price liberation event of the decade.

It is commonly known that JP Morgan Chase in the major player in commodities futures markets trading. Not only do they take massive naked short positions (betting that prices will fall), they do it with large substantial leverage. What isn’t as well known though is that Chase acts as the agent for the Federal Reserve Board and other central banks in ‘managing’ the markets on their behalf. Central banks want ‘orderly’ precious metals markets and prices and currencies which don’t gyrate wildly. Only then can they achieve stealth inflation in their monetary policy which is so beneficial in servicing debt. It also makes for good (meaning effective) politics.

3. Insufficient Physical Inventories
While it is normal for traders to roll their expiring contracts over into new paper trades, some traders accept cash in settlement rather than the metal. At hearing of the CFTC in 2010 Jeff Christian inadvertently confirmed that there is little bullion in storage at the London Metals Exchange or New York’s COMEX to back the metals trading. He justified this fact by noting that only one ounce of one hundred traded is paid out in physical metal. This revelation confirmed a much worse reality than even critics, such as the Gold Anti-Trust Action Committee (GATA), had expected. It seems that the Asian and Mid East buyers and owners of bullion have been removing gold from their dealers’ vaults and are taking it “home” thus leaving much less than previously thought in the London, New York and Toronto vaults.

In addition to what looks like a production peak in the gold mining industry (production has fallen in 5 of the last 8 years), central banks have for the first time recently become net purchasers (having bought more gold last year – 425 tons – than at any time since 1964).

The single largest purchasers of metal these days, other than central banks, are the bullion ETF’s (Exchange Traded Funds) which ostensibly have their metal inventories in vaults. These relatively new investment vehicles, unfortunately, are not transparent in their business practices. Regular audits by reputable accounting firms and allocated and segregated bullion inventories stored in reputable vaults are opaque at best. This begs the question: “Do the large ETF bullion funds actually have the metal they purport to own, or is their inventory more the ‘paper gold’ variety in which bullion trading exchanges seem to specialize?”


1. The revelation, outlined above, that there is insufficient physical inventory to meet new investment demand for ownership and delivery of physical bullion, is about to blow the price lid skyward.
2. As public awareness of sovereign debt mounts, it will drive home the reality of mounting government insolvency.
3. Confidence in currencies will wilt commensurately.
4. Investment demand for real gold and real money as a safe haven investment will expand exponentially.
5. These events should take place from mid 2011 through 2012 and extend further out toward 2015 before demand is satiated.
6. The dramatic price increases in gold and silver will at that point also satisfy the unstated desire of central banks and politicians to devalue their currencies in order to assist them in meeting their debt and unfunded liabilities.

After the 2008/2009 crash, governments bailed out their failing financial institutions and investment banks through a variety of innovative measures. The next time round most governments will not be in a position to do so – again. Even more troubling, the IMF (International Monetary Fund) will not be capable of rescuing the increasing number of insolvent governments and their financial institutions.

You may think my aforementioned views are crazy or perhaps just that my imagination is way out of hand or, at best, that I don’t have access to the appropriate reality checks. Be that as it may, I am increasingly confident that the consequences of fragile sovereign debt, precious metals market manipulation, insufficient physical supply, and the need for a safe haven investment refuge, will drive precious metals bullion and mining stock to unimagined heights.

The circumstances immediately ahead are largely unprecedented. History is therefore only marginally useful as our guide to the future price of precious metals. We are now in genuinely unchartered territory.

Get yourself positioned to take advantage of this event of a lifetime. Protect your assets from the next and more serious leg of the ‘Greater Depression’ directly ahead. Get a running start NOW on growing your future wealth.


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  1. If 911 was(and it was in my research and opinion)allowed and encouraged to happen by layers in the US power system (from Pentagon/Nato to President), then outright manipulation and hidden controls of gold/silver will be of no surprise. ‘They’ will let it rise and fall as ‘they’ wish. So much for free markets and democracy and the ‘free world’.

    Nevertheless, I am heavily invested in physical and miner stocks. What else can one do???

  2. You forgot one detail…

    The I-1099 requirement to become effective in 2012… How will this affect gold and silver prices when it becomes apparent that sellers of any amount of gold over $600 will have to be reported to the IRS? That form IDs you, the seller and the coin shop, the buyer. You will not be able to sell a SINGLE ounce of gold from 2012 on without being noticed. The reason this form will then be required is to find out who has gold, and not only tax it, but also find out who the major gold holders are so that the IRS can conduct confiscation operations. They know from last time that quite a bit of gold remained in private hands in spite of the threat of punishment. This means, that to avoid this fate in January 2012, gold holders will attempt to sell out of gold into silver only to bid up silver well over $600/oz. When that happens, people will then get out of their larger silver bars into junk silver in order to stay under the radar for silver sales/purchases.

    Silver would have to approach:

    $840/oz for a silver dollar;
    $3361/oz for a silver quarter;
    and $8,391/oz for a silver dime for the IRS to take notice of your transaction.

    I’ve positioned myself accordingly. Already, two attempts have been made to repeal this provision hidden in the health care bill that passed. FAIL. I’m of the opinion that things are so screwed up that this provision will not get repealed, and a revolution will become required.

  3. Lol!, lol!
    I’m a Gold bug since 1978, and follow the Gold price and also the prognostic from “guru”, but nobody were able to mention the Gold price at certaint time. NOBODY.

    But one thing I agree, it will go up and certainly higher the $2500. but when???

    The “$10,000 in 2012” I won’t mention that to my friend Gold investors.
    Otherwise they will smile and the word stupid will fly!

    But, hi, hi, ho, ho, lol,lol,

  4. I surely agree with you that there isn’t anywhere near enough gold to back all the ETF gold certificates floating around, but didn’t the accusation against Scotia Mocotta turn out to be false ?

  5. Whether gold goes to $5,000, $10,000 or higher, who is going to buy back your gold when it reaches those heights?

    Some commentators implore readers to NEVER sell their core positions, but how does one profit watching the price of gold start down the roller coaster, then go parabolic, and then crash back to reality again if you never sell at the highs?

    Are you suggesting that gold and silver are never going to be had for their current values? I am fairly new at this stuff and have some physical.

    Please give me some direction as to how to play the coming boom in both gold and silver. Thank you for your time . . . and patience with a novice.


  6. Yes, and here’s another reason.

    IF the gold to paper ratio IS one to one hundred, based on the fact that only one percent of buyers traditionally take delivery, then a severe intrusion of delivery demands by Asia, India etc., as seems to be happening now, will further bloat that 1 to 100 ratio because if 2 or 3 or more are now in the demand delivery mix there is an even less supply of physical product to service the one hundred “owners” with.

    As a result the kind of ratios approaching the hypothecation rates of the height of the mortgage crisis could now be setting up in PMs, especially gold & silver.

    What the catalyst will be to create a price rush & eventually a ‘force majeur’ I cannot imagine. But I can imagine a VERY dicey game now being played by the bullion banks compounded by the fact that if, when the loans were initiated, they were from “sovereign” gold stores and those bars were sold AND DELIVERED, leaving only an IOU for specie, then a very hairy scene could develop with the speed of SHAZAM (somebody changing into a Superman suit in a telephone booth.)

    No wonder China is taking their gold out of London. They are worried that the other 99 will want to, of a sudden, do the same thing!

    Best to all ye pilgrims on the stormy sea of (manipulated) finance. g-9

  7. Hello,
    Firstly, I am a Canadian who has been watching and studying these events for around 12 years or so – and bought most of my bullion at the 1990 lows – mostly due to my own conclusions as to what is going to happen.

    Your conclusions IMO are very possible…My only quibbles (or confusions) sees me wondering why a default risk was not mentioned as a possible stimulus to high gold and silver prices. Or a default in one leading to a blow up of the other.

    You have covered the shortage in metal factor – that is prevalent because or in spite of the paper gold trading system – but perhaps you did not follow this concept to its logical conclusion:
    – IF this summer (for example) sees a failure to deliver default (in either metals) in either London or New York, the price should blow up,,,,,but it should blow up due to the fractional reserve nature of these markets and the FACT of not enough small gold at the retail level to sustain even a modest rise in demand…

    Any problems in gold supply at ANY source will ensure a public response that will quickly reveal severe supply problems. THAT’S what will take the initial spike to loftier heights….

    I wonder at the inference about Scotia Mocatta in Toronto as the lack of metal there has been a problem for some 4 years now. I know, as I have been keeping track of this for years. But essentially it is just another indicator of shortage. None of this is important unless the public gets alarmed about it…or twigs to the fact that there are net worth issues involved for everyone.

    As for the paper markets – as you correctly point out that their sole purpose is for suppression of prices for various reasons – they will be closed very quickly and THAT will set up some additional political moves that we can only guess at (confiscation by governments?).

    Note also that the famous poster from Kitco, ANOTHER(thoughts!) said that “In the end the US dollar and gold would rise together. HE SAW the debt defaults for nations occurring way back in the 1990s. And right now that is exactly what is occurring.

    So gold and silver will blow up,,,,for sure. My only worry is whether my hungry, impoverished neighbour isn’t going to be shooting his neighbours in order to survive….That is an uncharted territory too….And the public still has no clue as to what is happening out there.

    Most people that you know including most of your family will likely be reduced to a poverty level….THAT is a problem that might trump any smugness that one is now secure.

    Nice job,

    Best regards,


  8. Sent: June 14, 2010 7:36:52 AM
    To: [email protected]

    Why is it that you guys who write so well on the commentaries for precious metals, and make really plausible arguments as per the example of your writing of JP Morgan manipulating the metals markets,yet you just can’t seem to get thru to guys like Ron Paul on this subject?

    Is there some kind of consensus between all of you that this guy is bought and paid for and really doesn’t have the balls for a real fight when he gets to question Bernanke and guys at the Treasury? I mean, what can it hurt this guy to let it all hang out at his age and position in life?



    You know, after reading all these “conspiracy” theories for years and years, and never seeing any change, you must understand how little guys like me who invest in the juniors and the metals have become bitter and skeptical. I don’t believe in anything anymore unless it’s sitting there in the palm of my hands.

    One other thing I gotta mention is this blind faith Ted Butler has in Gary Gensler, at is just laughable and again, will not go anywhere.

    Did I mention bitter and skeptical? oh yeah,and Brooksley Born, as hard as she fought for reform on deriviatives and CDSs, as head of the CFTC, why didn’t she see this naked shorting by the bullion banks?


    Thanks for the commentary.


  9. That is a teriffic article. I believe you are right on target.

    The price of the metals will be so high that it will take your breath away. The price of gold hasn’t even doubled since 1980. To equal the price from then to now with inflation factored in would be around $2200.

    This will be a white knuckle ride. Look at all the dollars our government has been printing since then. Tell me the price of gold and silver will not play catch up when the bubbles start popping.

    The popping has already started with the stock market and with real estate. The market will continue its downward run and real estate will go through another leg down for the next couple of years.

    People will be looking for the safe haven to put their money…that will be in the hard assets such as gold and silver.

    Collectibles will not be safe. I have sold my collectables at a great price and am buying gold and silver. Be prepared now while the prices are cheap.

  10. Dear Arnold,

    You asked me to call you nuts, so here goes.

    You are nuts.

    Frederick Macaskill

  11. Another email sent directly to the Editor:

    I surely agree with you that there isn’t anywhere near enough gold to back all the ETF gold certificates
    floating around, but didn’t the accusation against Scotia Mocotta turn out to be false ?

  12. I received the following email regarding the above article:

    Re: Gold has only been trading unencumbered from backing fiat currencies since Nixon’s 1971 decision

    As long as a currency represents an asset (usually precious metals) it is a paper currency with the same intrinsic value as the underlying asset. It is only when there is no asset behind it, just the government’s fiat (say-so), as happened to the US$ in 1971, then it becomes a fiat currency.

    For whatever it may be worth …