Zero Hedge 
Tuesday, June 1, 2010
From deflationist extraordinaire David Rosenberg:
GOLD HEADING TO $10,000 AN OUNCE?
Peter Schiff thinks that is a real possibility — see page 45 of the current BusinessWeek. There is no doubt that when benchmarked against the CPI, money supply and GDP, gold can easily double from here. Demand is always difficult to forecast, especially for jewellery, but we do know that central banks have very deep pockets and bought more gold last year (425 tons) than at any other time since 1964.
The supply backdrop is also highly conducive to a sustained bull market. Mined production is no higher now than it was a decade ago and has fallen outright in 5 of the past 8 years. And, we know what the marginal cost curve is doing because there is so little cheap supply left in the ground that gold companies now have to drill as much as 2.3 miles to get to the yellow metal in South Africa (and all Bernanke has to do is press a button).
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And a gold anecdote from a Rosie reader:
GOLD SAVES LIVES!
The letter below comes Matthew, a subscriber to our research, pertaining to our biblical bullion comment yesterday. I thought his email was worth a reprint:
“David, Interesting gold citation from the Bible. In 1904, my grandfather was conscripted by the czar to fight for Russia in its war with Japan. He escaped from the Ukraine and made his way to a port where the captain of a freighter to NY refused to accept the small amount of fiat currency he was offered. But he let my grandfather board in exchange for a few gold coins — although the few coins would sell for much less than the asking price for passage in local fiat. That captain knew all one needs to know about commodity currency.
Warm regards, Matthew”