Precious metal hits new record high as greenback plummets in reaction to expectation of Fed’s quantitative easing policy
Paul Joseph Watson
Prison Planet.com 
Wednesday, September 22, 2010
In light of gold hitting a new all time record high today, Omnis senior managing director James Rickards’ forecast that the precious metal will soar to anything up to $11,00 in the aftermath of a dollar collapse makes the current $1,300 level look tame in comparison.
Gold bullion’s climb to just below the $1300 an ounce psychological barrier has precious metal investors giddy, but the story behind gold’s continued rise is more about dollar weakness than anything else.
Gold spot hit a fresh all time high of $1,294.95 in London today with $1,302 the next major target, while silver leapt above the $21 an ounce level for the first time in 30 months
However, paralleling gold’s rise has been the crumbling dollar, which has hit a 6 month low when measured against a basket of other currencies. The greenback was at $1.19 against the euro just a few months ago but has since sunk to around the $1.33/$1.34 level.
The Yen recently hit a 15 year high against the dollar, a rise that was only subdued by deliberate Bank of Japan currency manipulation, and the Chinese Yuan also recently hit a new record high against the greenback.
Dollar weakness has been fueled by Federal Reserve chief Ben Bernanke’s indication that the Fed is about to launch a fresh round of quantitative easing by buying millions of dollars of bonds.
Gold has also been boosted by central banks becoming net buyers of the precious metal after years of selling. Leading gold mining companies have also been bullish in their future outlook and have announced that they plan to wind up forwards sales, a clear indication that high prices are here to stay.
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As we have reminded our readers all along, buying gold is not so much a way of making money (although people who bought when gold was at just $300 an ounce may beg to differ), but is a means of preserving wealth as the dollar is rapidly devalued by ceaseless money printing and the rising cost of living.
As Jim Rickards explained during a recent CNBC interview, forecasts for gold to hit $5,000 an ounce are entirely realistic, given the fact that if the gold standard is reintroduced, it will have to be set at an accurate inflationary level against the dollar.
“It’s not really a forecast, it’s simple math and it’s where we’ll end up once the dollar collapses,” said Rickards, adding that gold’s range could be as high as $11,000 dollars an ounce, much to the astonishment of the CNBC anchors.
Rickards emphasized that gold is not going up, the dollar is collapsing, and that we’ll see relevant price comparisons in all areas of the economy. For example, a nice suit will still cost roughly one ounce of gold to purchase as it always has, the difference being that it will cost many many times the current amount to buy that same suit in dollars.
Watch the clip below.
Paul Joseph Watson is the editor and writer for Prison Planet.com . He is the author of Order Out Of Chaos. Watson is also a fill-in host for The Alex Jones Show. Watson has been interviewed by many publications and radio shows, including Vanity Fair and Coast to Coast AM, America’s most listened to late night talk show.
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