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Bloomberg reports that gold will be permanently above $1,000 an ounce according to Marc Faber (Gloom, Boom & Doom report), due to central banks printing money to help fund budget deficits.
“We will not see less than the $1,000 level again,” Faber said today in London.
“Central banks are all the same. They are printers. Gold is maybe cheaper today than in 2001, given the interest rates. You have to own physical gold.”
He also said that China will keep buying resources including gold.
“Its demand for commodities will go up and up and up,... Emerging economies will grow at the fastest pace.”
He also mentioned that western countries will be lucky to avoid economic contraction, while the Federal Reserve will maintain interest rates near 0%.
For an opposing point of view, please our Paul van Eeden article.
Up or down? That is why we use straddles. It does not matter which way it goes.
2 comments:
Speaking of gold.
Remember British Prime Minister Gordon Brown?
When Brown was the nation's chief finance minister a decade ago, he decided that gold had become relatively useless to the government -- without the gold standard, it was just an inert metal, and it was expensive to store.
Brown sold off 400 tons, or 60% of the United Kingdom's gold, between 1999 and 2002. Brown's problem: Gold was selling at a record low inflation-adjusted average of $275 an ounce at the time. It turned out, had he waited 10 years, the U.K. would have made four times what it hauled in from the sale.
Seamus ;)
Amazing, isnt' it? Talk about perfect timing, to do the worst thing.
Thanks.
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