Wall Street bailout, overprinting of dollar will cause commodity to soar says 40-year market veteran
Paul Joseph Watson
Monday, October 6, 2008
40-year market veteran and fund manager Robin Griffiths of Cazenove Capital Management predicts that the overprinting of dollars as a result of the Wall Street bailout will act as a catalyst for gold prices to rocket to $2,000 an ounce, as demand for precious metals outstrips supply amidst rumors of market manipulation.
Griffiths said that as the world deleverages, dollar strength could drive gold prices down to $750 an ounce, but that this would be the bottom and it would represent a great buying opportunity.
“Once we get through the crisis, people will realize they’ve printed an awful lot of dollars, too any dollars, and thrown them from a helicopter window – we need to hedge the risk of too many dollars around and real stuff is the way to do that and gold will be an excellent way,” Griffiths told CNBC this morning.
“I think we’re coming up to re-test that $750 low and that’s going to be a buying opportunity, and if this is correct on a 12 month view from here, we’ll go straight off the top of the chart and eventually I’m thinking a target of $1400 to even the $2000 range,” said Griffiths, admitting that the forecast had caused him to become a gold bug.
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A recent Reuters snap poll of traders, analysts and industry officials predicted a more modest rise of 6 per cent over the course of 2009 to around $959 an ounce.
However, as the website goldprice.org points out, the demand for physical gold is frantic and people are willing to pay premiums of $50 or more to get their hands on the precious metal.
“That casts the validity of the paper price into doubt, and points to some government manipulation holding down the price, so the weakness of their rescue operation won’t be called into question by a gold price over $1,000,” states the website.
The potential for hyperinflation is a very real threat, and it has led to a spike in gold purchases. The Royal Canadian Mint recently sold out of one ounce gold bullion bars in what tellers described as a “crazy” demand to own the precious metal.
Michael Levy, a gold broker based in Surrey, B.C., said the volume of people purchasing gold is at its highest since the inflation scare of 1979. “People were buying then because of inflation, now because of a growing distrust in paper currency,” he said. “It’s a different mentality but the same rush.”
As the istockanalyst.com website highlights, massive economic correction has routinely been preceded throughout history by a gargantuan demand for gold and silver bullion.
“All through history, every time major confidence is lost in fiat based economies, when those economies face massive corrections in terms of either hyperinflation or deflation, people flock to gold and silver bullion,” states the website.
This article was posted: Monday, October 6, 2008 at 4:34 am