Yahoo! News: The case for $3000 gold: Morning Brief..."The Fed can’t print gold"
Goldbully
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The case for $3000 gold: Morning Brief
Myles Udland
Markets Reporter
April 22, 2020
"The Fed can’t print gold"
The economic response to the coronavirus has been unprecedented.
From record drops in consumer spending, to expectations of a record decline in GDP growth, and a never-before-seen explosion in support from fiscal and monetary authorities, we are in a truly unparalleled environment for investors.
And amid these newfound challenges, strategists at Bank of America Global Research think the case has strengthened for the oldest safe haven in the book: gold.
“As the ultimate store of value, gold prices have performed well during the past 15 months, posting a rally of over 10% since the Federal Reserve did a monetary policy U-turn in January 2019,” write strategists led by Michael Widmer.
“The size of major central bank balance sheets has been stable at around 25% of GDP for the last decade or so, just like the gold price,” the firm adds.
“As economic output contracts sharply, fiscal outlays surge, and central bank balance sheets double, fiat currencies could come under pressure. And investors will aim for gold. Hence, we mark-to-market our forecasts and now project an average gold price of $1,695/oz in 2020 and $2,063/oz in 2021... we have also decided to up our [18 month] gold target from $2,000 to $3,000/oz.” (Emphasis added.)
The case for the yellow metal from BofA is straightforward — investors seeking protection from an economic downturn and a targeted reflation of the economy via fiscal and monetary stimulus will turn to gold for safety.
Or as BofA writes: “The Fed can’t print gold.”
(cont'd in link)
Comments
The question is, how much will $3000 buy when gold reaches that price?
My Adolph A. Weinman signature
What? only $3000? What happened to the $5000 goal along with $100 silver
An ounce.
Knowledge is the enemy of fear
Gotta get to 3000 before you get to 5000. Easy 🙂
It's at $2443.00 an ounce today, but that's in Canadian dollars or as some of us say....... 'Canadian Pesos'.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
the Fed doesn't need to print more gold. it is silver that is in short supply.
Well, since Fed Chairman Powell did say that the Fed would provide "unlimited funds" to bail out every political interest in Washington DC (except for actual taxpayers), it sure feels like we're sucked into the middle of some kind of income redistribution scheme.
Nobody asked me for my opinion, or my advice, or my consent to have this carnival of big money bailouts. I don't even know anybody who knows anybody who was consulted.
Nevertheless, consider that "unlimited funds" equates to an infinite supply of fiat currency, which logically implies a value approaching zero for the purchasing power of the fiat currency.
What's really scary is that we don't have any idea what order of magnitude those "unlimited funds" include. Is it $10 trillion or $100 trillion? We know how much debt and how much in the way of official unfunded liabilities that taxpayers are obligated to pay. We don't know how much has been hidden and spent in black ops and secret programs. And graft.
All this, on top of a pile of derivatives contracts that is so large and interconnected that nobody can even calculate the outcome of all these highly-leveraged arrangements if they start failing.
With all of this, not many people get to really know what's going on in the world. Actual news reporting is a thing of the past, and has been for an untold number of years.
Gold, being a counterbalance to an unsound fiat currency whose implied value approaches zero, should correspondingly head in the opposite direction toward infinity and toward an inconceivably large number.
Besides all that, gold has no counterparty risk.
I knew it would happen.
Nobody is talking about colloidal gold being necessary for ANY test capable of detecting covid-19.
Sodium citrate + gold chloride makes colloidal gold, which is (currently being and will always be) utilized in every test kit that can accurately detect the virus.
Sure 6bn kits might not be a ton. 60bn, maybe not that either. But how many are we gonna need in the next two years? That's a lot of colloidal gold even if they don't use a lot per test.
People always talk about gold having industrial applications.. well, here's a very important one that's gonna cause an increase in demand over several years.