Gold to Hit $1,600 in 2010 as Financial and Economic System Collapse
Commodities / Gold and Silver 2010 Jan 19, 2010 - 05:06 AM GMTBy: LewRockwell
Gold price volatility has picked up in the past few weeks as diverging views about the next move in the price of gold have intensified. The gold price declined $152 off its early December high of $1,226.50 before rallying to move comfortably back above $1,100 per ounce. While gold has seen violent daily and monthly oscillations, the longer-term trend has been decidedly positive over the past decade – with investors driving up the gold price 281% over the past ten years.
The events of the last 18 months have further strengthened the fundamental investment case for gold as conveyed to Barron’s by their all-star panel of money managers and investment strategists. No longer relegated to the backwater of the investment landscape, gold-related investments have slowly but surely entered into the mainstream.
This past weekend, Barron’s published part one of its annual Roundtable with a high-profile panel that included Bill Gross, Mario Gabelli, Fred Hickey, Felix Zulauf, and Marc Faber. While the group was cautiously optimistic on stock prices due to the continued efforts of governments across the globe in providing liquidity and stimulating demand, it was this same public sector profligacy that prompted many of them to espouse the bullish case for gold.
Panelists voiced agreement with Mr. Zulauf’s statement that “Central banks have spent trillions of dollars to manipulate asset prices higher, and that’s a positive in the near-term.” Gains of 5% to 20% in the coming year – fueled by government spending and strong corporate profits – was the consensus among the money managers and investment strategists. Zulauf, as he has in the past, expressed his concern with excessive government spending and the eventual price that could be paid for America’s deteriorating balance sheet noting, “All federal debt, including unfunded liabilities, isn’t 100% of GDP, but 600%. Eventually the U.S. will arrive at a point where as Marc (Faber) says, interest payments on government debt all of a sudden go to 20%, 25%, 30% of tax revenue. And once you go above 30% you are done. You go into default or your currency breaks down and your system collapses.”
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