$10,000 gold doesn’t sound that crazy anymore

Gold’s been in a decade-long bull market, yet pundits still argue it’s a bubble. In fact, many believe we’re just at the beginning of the most powerful phase in the gold uptrend. $10,000 an ounce isn’t so far-fetched as it seems.

I’ve been listening to The Financial Sense Newshour with Jim Puplava for about two years now. The host is unabashed about his bullishness on gold, but he backs it with logical arguments, and it’s been difficult to argue with his stance that gold is going to keep going up until we see some new form of non-fiat currency.

It wasn’t until this week, though, that I heard Mr. Puplava actually give a price target on the metal:

“We aren’t even close to where I see the price of gold and silver going. We’re probably in the second phase of this bull market. Wait until we get to the third phase of this bull market where I think you’re going to see prices closer to $10,000. I know people probably think I’m nuts saying that, but I can make all kinds of fundamental reasons why we think that’s where we’re eventually going to end up.”

Mr. Puplava attributes the rise in gold to one thing: money-printing at, not just the Federal Reserve, but by central banks and governments around the world.

“The debt issue, as Reinhart and Rogoff have told us in This Time Is Different, it takes about 10 years to work those things off.

“We’re only four years into a 10-year debt cycle work-off. So we have another six years to go, and does anyone believe that governments are going to stop printing money? I mean just take a look at what they’re talking about bailing out, back-stopping, quantitative easing, they have all kinds of fancy names for it, but we all know what happens when they do this kind of thing.”

It turns out Jim Puplava’s not the only one who thinks we could see gold at $10,000 an ounce. Nick Barisheff (the CEO of Bullion Management Group Inc.) is actually working on a book titled “$10,000 Gold – Why it will get there sooner than you may expect.”

“Unless current monetary policy is drastically changed, it will almost certainly rise to $10,000 an ounce and beyond,” Barisheff writes (per ResourceInvestor).

He believes three facts are contributing to gold’s ongoing march toward five digits:

  • The loss of purchasing power of global currencies
  • The inflationary effects of money creation
  • Irreversible trends (an aging population, peak oil and outsourcing) will continue to cause gold to rise

Barisheff goes onto point out what I think most outsiders fail to miss when they’re thinking about gold: it doesn’t rise in value. It’s only going up in price because the value of our dollars, euros and yen are falling.

And, if you fall in their camp, you’ll probably come to the same conclusion they have: the fiat currency system that President Nixon implemented in 1971 is on the verge of collapse. And until we get a new currency, gold, silver and other hard assets will be the only vehicles we’ll have to protect the assets we’ve a worked a lifetime to accumulate.

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