Commodity Trade Mantra

A Panic Into Gold will be Triggered by the Panic Out of Paper Currencies

A Panic Into Gold will be Triggered by the Panic Out of Paper Currencies

A Panic Into Gold will be Triggered by the Panic Out of Paper Currencies

Gold has gone up more than 18% this year, but Doug Casey told Albert K Lu this is just a small move. He sees gold going much higher in the next year:

I think there’s going be a panic into gold and out of paper currencies. So this small up-move that we’ve gotten here since the beginning of the year, that’s just a harbinger. I think this time around, we’re looking at $2,000, $3,000 an ounce. I think it’s going be incredible.”

The question is why? Casey explains his bullish outlook on gold – and how silver could hit $100 an ounce – in Lu’s latest Gold Videocast.

Follow along with full transcript:

Albert: For Schiff Gold, I’m Albert Lu. I’m very pleased to be joined today by Doug Casey, the International Man, who joins me from Argentina. Doug, how are you?

Doug: Super, Albert. Nice to talk to you.

Albert: Doug, we’re having a fantastic year in gold. It’s up over 18% year to date. We just got a bump today of over half percent. It’s a fantastic year. What do you think turned this market around, because it was downhill for quite a while there?

Doug: Well, it’s not just gold, it’s actually all the commodities peaked back in 2011, and that was five years ago. Five years ago is a long bear market. In the meantime, even while commodities have been going down, all of these idiotic governments have been reducing interest rates and printing up trillions of new currency units. So at this point, I expect that the upside in gold and most other commodities, not all of them, is going to be explosive. We’re at the precipice of what I call the greater depression. Things are going be so scary by the end of the year, I think there’s going be a panic into gold and out of paper currencies. So this small up-move that we’ve gotten here since the beginning of the year, that’s just a harbinger. I think this time around, we’re looking at $2,000, $3,000 an ounce. I think it’s going be incredible. It’s going be scary, it’s going be so incredible.

Albert: You actually came on my show earlier and made a prediction. You think that, basically, we’re going hit the tail end of what you called “the greater depression hurricane.” You think that’s going happen in 2016?

Doug: I think that by the time the year comes to an end, people are going to feel like we’re back in 2008, except it’s going to be much different than 2008, much worse, and last much longer than what we saw in 2008 and 2009. This time, I think it’s going be…it’s so hard to say. It’s going be financial chaos. I’m not going say it’s going to be catastrophic deflation, which is entirely possible with all of the debt in the world. So much of it could be defaulted on, which could wipe out trillions of currency units; or whether it’s going be hyper-inflation as these stupid central banks create even trillions more currency units. So you’ve got these two Titanic forces that are going be fighting against each other at the same time. So I don’t know which one is going to win. I’m just predicting that it’s going to be chaos and the greater depression as we go into the trailing edge of this hurricane; it’s going be very scary.

Albert: Yeah, it could be not one or the other but both, actually. You could have this tremendous deflationary crash later this year and, of course, that sends people into gold because of fear. But what really makes gold go up is when they come back with their solution. That is, the Federal Reserve, the Treasury, the government, they basically implement their solution, be it helicopter money, kiwi or something else. Isn’t that what really sends gold shooting to the moon?

Doug: Yes. There’s going be a panic into gold and I hope that since the gold stocks are so low right now, that they’re just a micro-cap area of the market and the exploration stocks are a nano-cap area, or maybe even a pico-cap area, that when the public gets the gold bit in its teeth, these little stocks are going take off. It’s going be like trying to get the contents of Hoover Dam through a garden hose. So it’s going be really explosive with a little bit of luck. I can’t tell you how bullish I am on gold, and also on silver. Different metal, different characteristics, potentially even more explosive though.

Albert: Yeah, let’s talk about silver a little bit. It obviously was just beaten up even worse than gold for so long. Now it’s come back. That ratio is coming back to where we have seen it in the past. It hit an 11-month high lately. So you’re still bullish on silver, more so than gold or the same as gold?

Doug: You know, it’s hard to say. The thing with silver is it’s a much smaller market than gold. About 800 million ounces of silver are mined every year as opposed to about 80 million ounces of gold, and that’s one dynamic that’s interesting because it sells for…what is it at the moment? I don’t know, one-seventieth the amount per ounce of gold. So you can argue, well, maybe it should be higher. Also it has many more industrial uses than gold, many, many more and more are being found all the time for both metals. They’re both high-tech metals that, in today’s high-technology world, they’re constantly finding more uses for this. Silver is the most reflective and the most conductive of all the 92 naturally-occurring elements. This is very critical, and of course gold is the most non-reactive, the most malleable, and the most ductile, so they both have tremendous industrial uses. On the other hand however, silver is mainly an industrial, not a monetary, metal, so that augers against it. But yes, I don’t know which is going happen, but if silver does take off, because it’s such a small market it’s much more volatile it could go to $100 this time, no problem.

Albert: Very good, Doug. I know you’ve got to run, so thank you for taking time to talk to us today on Schiff Gold. I really appreciate it and look forward to talking to you again soon.

Doug: My pleasure, Albert. Thank you.

 

 

 

Courtesy: Samuel Bryan

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