Agoracom Blog

Why Gold Will Hit $2,000 In 2010 and Possibly $4,000 Thereafter As China / USA Engage In Game Of Currency Chicken

Posted by AGORACOM at 10:52 AM on Sunday, November 29th, 2009

Jim Rickards, director of market intelligence for McLean, Virginia-based consulting firm Omnis, was on CNBC recently repeating his very compelling case for gold.   I stress “repeating” because gold “extremists” are typically not welcome on CNBC, yet in an appearance back in September - GATA reported the following

Rickards was asked to analyze an essay published in the Wall Street Journal by Fed Governor Kevin M. Warsh – the Fed governor who acknowledged to GATA that the Fed is concealing records of its gold swap arrangements with foreign banks.  Rickards construed Warsh’s essay to mean that the Fed will be seeking to regulate the gold price closely even as the Fed needs to devalue the dollar by about half over the next 14 years to restore solvency to the United States.

…… Central bankers, he added, now plan to turn the International Monetary Fund’s Special Drawing Rights into the new world reserve currency replacing the dollar, a new round of money printing to create some stability in the world financial system during the dollar’s steady but gradual and controlled devaluation.

On his latest CNBC appearance, Rickards states that gold should easily reach $2,000 per ounce next year just as a matter of supply and demand.  However, given the fact the United States and China are devaluing their currencies against each other in a game of chicken, gold could start being considered money again, leading to a price between $4,000 and $11,000 to support the big increase in the world’s money supply.

Whether you agree with him or not, his latest CNBC interview is a must watch.  He is articulate and, as you can see from the response of fellow panelists, very well respected.  You can watch Rickards’ comments at the CNBC archive below.


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