Investors warn liquidation of assets and deflation is temporary calm before the storm
Thursday, Nov 13, 2008
Economic experts have predicted that rampant inflation caused by government stimulus packages will soon take hold of the economy and force precious commodity prices to all time highs.
Johann Santer, MD at Superfund Financial Hong Kong told CNBC that he expects to see gold climb from its current position at $710 to a whopping $1500-$2000 an ounce within the next three months.
“Should money should be going into cash, paper?” asked CNBC anchor Martin Soong, to which Santer replied in the negative:
“Not necessarily, we see that for the time being this remains the right strategy to be in, of course people are quite nervous, but once we start to understand again that it will not really protect us from inflation, which most likely will come in the long run, because of all the stimulus packages, I would assume that we should also start looking at the gold price at the moment and find opportunities there.”
Santer explained that deflation is not going to protect us from what he sees as inevitable heavy inflation in the long run caused by the huge amounts of money being pumped into the market in the name of saving the economy.
Santer predicted that we may even see double digit inflation.
“We better get prepared right away and start to look at real assets, for example gold could be really attractive at the moment, trading at $710.” Santer added.
“At the moment there is a major sell off in everything, people are really looking at cash and treasury bills but in the long run, we will not escape from inflation so we have a medium to long term target of $1500 within the next three months.”
Watch the video here.
Johann Santer’s prediction mirrors that of numerous other fund managers and top investors such as Jim Rogers, Robin Griffiths and Jurg Kiener who are now predicting that global central banks’ insistence on printing their way out of economic turmoil is setting the stage for a hyperinflationary holocaust, a knock-on effect of which will be gold’s acceleration towards $2,000, as demand for precious metals outstrips supply.
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Meanwhile another investor, Puru Saxena, CEO of Puru Saxena Wealth Management, has told CNBC that within the next four to five years he sees oil prices skyrocketing to up to $300 a barrel.
“Over the last few months we have seen widespread liquidation of all assets, nothing has been spared, commodities, corporate bonds, real estate, equities in the emerging markets, the Dow Jones the FTSE, everything has been sold because of distressed liquidation. However, if you look at the supply and demand dynamics of most of the natural resources, whether it’s energy or food or mining companies, they are still very very bullish.” Saxena stated.
He explained that he feels people are only looking at one side of the equation at the moment with regards to the decline in the value of oil, which is currently hovering around the $55 per barrel mark.
Saxena predicts that we are going to see a huge rebound in resources in the next couple of years due to increased demand and reduced supply.
“Obviously no one has a clue where the market will be in two or three years from now, or indeed the price of oil, but over the next four or five years I suspect it will go to over two or three hundred dollars a barrel.” Saxena added.
Watch the video here.
With OPEC continually cutting oil output it is not surprising to hear such predictions emerging from investors. We have been continually warned that the sharp decline in oil prices is a temporary respite only.
We have previously reported on the corporate elite’s efforts to hike oil prices up to the $200 mark. Earlier this year, a report by Goldman Sachs Group Inc. forecasted that oil prices will reach $150 to $200 dollars a barrel within 2 years. JPMorgan Chase & Co have also predicted that prices could rise to $200 a barrel. Such levels would set the stage for a possibly catastrophic post industrial revolution.
This article was posted: Thursday, November 13, 2008 at 11:45 am