Gold Price Forecasts

The current spot price of gold is $2,656.41. But what will it be a few months or years from now?

From earlier today we have a self-proclaimed expert saying:

Gold Won’t Save You From Historic Market Bubble Bursting: Henrik Zeberg

“I think gold is actually in a kind of a smaller bubble by itself now,” Zeberg stated. “I think you’re going to see a rather strong decline in gold to the very reasons that I just said talked about here.”

Zeberg’s bearish stance on gold is rooted in his expectation of a deflationary bust. As the economy contracts and inflation falls, the US dollar is likely to strengthen, making gold a less attractive asset.

“I don’t want to hold gold into that environment,” he said. “I actually think it’s a very bad environment to hold gold.”

From an entire panel of experts on October 22nd:

Latest Gold Price Forecast & Predictions | Gold Eagle

Gold Forecast 1 Year
Bullish: $3,200
Medium-term price drivers:
US dollar, bear market in stocks and recession, investor sentiment

Gold Forecast 3 Years
Bullish: $4,825
Long-term price drivers:
US dollar, US budget deficits, central bank monetary debasement, negative real interest rates, and the potential for an uptick in sovereign buying.

I’m reminded of something an old engineer I knew many years ago was fond of saying:

The wonderful thing about standards is that there are so many to choose from.

Biggest Popular Delusion in World History

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#Bitcoin, crypto, and blockchain will likely go down as the biggest example of popular delusions and the madness of crowds in world history. The overall losses when the bubble finally pops will be staggering. It’s not just the speculators who will be left holding a bag of worthless Bitcoin, but also the investors who funded all the infrastructure and related businesses. This is likely the biggest misallocation of resources in human history. Not only will the net losses to society be staggering, but Bitcoin itself will do more to tarnish the reputation of libertarian capitalism and the concept of sound money than any failed government program ever has.

Peter Schiff @PeterSchiff
Posted on X, November 11, 2024

I am in tentative agreement about bitcoin being the biggest popular delusion in world history. The possible exception to this is faith in communism. And the tremendous amount of electricity consumed just boggles my mind.

But the bubble will last as long as enough people have faith in it. It is conceivable that will be decades or even a century.*

But the [dollar | bitcoin] will last as long as enough people have faith in it. It is conceivable that will be decades or even a century.


* Edited as per a suggestion via email from Mike H. only November 13, 2024.

What About a Zero Inflation Target?

I recently finished Judy Shelton’s book Good as Gold. Today I ran across this article about her: Trump’s former pick to join the Federal Reserve has proposed a radical solution to solve inflation (msn.com).

I have never even taken an economics class, but I found her book ideas interesting. Among other things it outlined a way for the U.S. and the entire world to ease into a gold standard. Since gold reached a new all-time high today.* The idea of returning to a gold standard has more than a little bit of attraction.

As the article points out she is also an advocate for a target of zero inflation. The article is more than a bit down on that idea. But if I were President Trump, I would set up a debate. The debate would be between Shelton and a couple opponents of her zero-inflation suggestion. A compromise of a target of 1% inflation would still be beneficial. It would provide useful data about the utility of zero or near zero inflation.


* Or, the dollar hit a new all-time low.

Communism is no Longer an Economic Theory

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So the idea here is that the dominance in the Academy of skeptical and irrationalist epistemologies provides the academic Left with a new strategy. Confronted by ruthless logic, harsh evidence, they have a solution: “That’s only logic and evidence. Logic and evidence are subjective. You can’t really PROVE anything. FEELINGS are deeper than logic, and my feelings say Socialism.”

That’s my second hypothesis about the origins of Postmodernism. I call it the Kierkegaardian hypothesis, that Postmodernism is the crisis of faith of the academic Left. Its epistemology justifies taking a personal leap of faith in continuing to believe your Socialist ideals.

Communism is no longer an economic theory. It has failed utterly at that. It’s now a religion. And it’s proselytized in our education systems.

Kevin
October 23, 2024
More Quora Content – The Smallest Minority

Unfortunately, I am of the opinion this change does little, if anything, to make it less destructive. Politics have been an emotional team sport for a long time. Team communism will lose a few supporters, but they will pick up others. And those they pick up will be the type of people who thrive on strong emotions. Seeing those that opposed them piled up in a ditch will only give them a thrill and the wish to see more dead non-believers.

We Live in Interesting Times

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Gold has been on a parabolic run since October last year, rallying from near the $1,800 level to score consecutive back-to-back all-time record highs – not once, not twice, but on 37 separate occasions, so far this year.

Yes, you read that correctly. That’s 37 all-time record highs, so far in 2024.

On Tuesday, Gold prices skyrocketed to a new all-time record high of $2,758 an ounce, surpassing the precious metals previous all-time high of $2,749 an ounce reached only a day earlier – extending its gains by an impressive 53%, from this time 12-months ago.

According to GSC Commodity Intelligence – “Gold’s record-breaking run has been nothing short of impressive. Never before in history have we seen the precious metal score multiple back-to-back all-time record highs in such a short space of time”.

Phil Carr
October 24, 2024
Will The New BRICS Currency Supercharge Gold Prices? | FXEmpire

Of course, another way to read this is that the dollar has reached a new low.

Prepare appropriately.

Prepare for the Worst

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The U.S. in late 2024, IMO, is one lit fuse away from societal collapse–and there are multiple fuses, all lit. You can take your pick.

So, yes. Know your friends, neighbors, community. As the meme says, “Local, local, local.”

And prep like your life depends upon it.

TakeAHardLook
September 20, 2024
Comment to More Evidence of Astroturf – Area Ocho

I cannot find fault with this.

And have you seen the price of gold (buying power of the dollar)? It is up (down) over 45% (nearly 40%) compared to a year ago.

I want to be in an underground bunker in Idaho before the November election.

National Debt Will Turn Us Into Gaza

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A halfpinion looks at either the costs or benefits of a plan but not both.

Gaza residents were brainwashed to have a halfpinion about how to deal with Israel. October 7th was them getting the “benefit” too many of the residents wanted.

Now they are experiencing the “cost” side.

America has this same halfpinion disease. That’s why our national debt will turn us into Gaza fairly soon.

Scott Adams @ScottAdamsSays
Posted on X August 24, 2024

The same “disease” affects the gun control nuts too.

The One Man Whose Has Enslaved More People Than Anyone

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There is one white man who has enslaved more African Americans than anyone else in history.

His name is Karl Marx.

Alice Smith (@TheAliceSmith)
Tweeted on March 20, 2022

I would have thought it would be more accurate to have left out the word “Americans”. But it is true enough as is.

The U.S. Dollar Global Reserves Fall to 59%

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The global reserves count of the U.S. dollar has now fallen to 59% in 2024, reported the Atlantic Council The U.S. dollar in reserves stood at 72% in 2002 and has been declining steadily in the last two decades. In 22 years, the USD declined 13% in the markets as developing countries are distancing the currency from their reserves. In no surprise, BRICS member China’s local currency, the yuan, rose 3% during the same period.

Vinod Dsouza
August 10, 2024
BRICS: U.S. Dollar in World Reserves Fall Below 60% (watcher.guru)

We live in interesting times. Prepare appropriately.

Gradually, Then Suddenly

If the 159 countries number is true, this could be interesting.

159 Countries Set to Adopt BRICS New Payment System (watcher.guru)

Amid the alliance’s continued efforts to create a SWIFT alternative, the economic alliance has sought to create its very own BRICS payment system. It will play a major role in the alliance trade dealings. Specifically, allowing unilateral settlement to be done without the need for the US dollar.

The move is poised to be vital for the bloc and participating nations, and it appears there will be a lot of them. According to one Russian official, there are already 159 countries seeking to adopt the system currently. With a potential launch coming in October, it could have massive global market ramifications.

I’m not an economist, I have never even taken a class on economics. So maybe my concerns are imaginary, but I could see a large number of those dollars being used by other countries returned to the U.S. How many dollars?

Currency in Circulation | U.S. Currency Education Program (uscurrency.gov)

As much as one-half of the value of U.S. currency is estimated to be circulating abroad.

As of December 31, 2020, there was $2,040.7 billion in circulation, totaling 50.3 billion notes in volume.

From that same source we find that in 2022 there was $2,259.3 trillion in circulation. Using a bit of extrapolation and rounding we end up with about $1.2 trillion outside the U.S. in 2024. So, what happens if a substantial number of those dollars come back to the U.S.? It would seem to me that just one or two percent ($12 to $24 billion) would cause noticeable inflation. And then what? More people/countries would want to get rid of their dollars before they lose value due to inflation. It is a run on U.S. goods and property (land) to get something for those dollars. It is the dump of $1.2 trillion dollars all wanting something for their rapidly decreasing in value dollars. The GDP of the U.S. in 2023 was over $27 trillion. But GDP:

aggregates all private and public consumption, investment, government outlays and net exports.

The export portion of our GDP is about 10% of our total GDP, or $2.7 trillion. Not all of that $1.2 trillion would go into exporting of goods, but half or more into the export market would make for “interesting times.” And it would happen, as Ernest Hemingway famously said about bankruptcy, “Gradually, then suddenly.”

Prepare appropriately.

Total Disregard of the U.S. Constitution

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As vice president, a senator and California’s attorney general, Harris backed policies that imposed restrictions on speech, including by defending a law eventually struck down by the Supreme Court, which forced pro-life pregnancy centers to advertise abortions. On the campaign trail, Harris has indicated support for holding social media platforms “accountable” for “hate speech” and misinformation online.

New Civil Liberties Alliance litigation counsel Jenin Younes told the DCNF she is “extremely concerned about both Harris and Walz’s records on free speech.”

“Both have evinced either a disregard for or misunderstanding of the First Amendment, which protects ‘misinformation’ and ‘hate speech’— contrary to various statements the two have made,” Younes said. “The First Amendment recognizes that the government does not have a monopoly on the truth, as it has demonstrated throughout the COVID era during which it was one of the worst purveyors of misinformation in the country.”

During a 2019 campaign speech before the National Association for the Advancement of Colored People (NAACP), Harris said her administration would “hold social media platforms accountable for the hate infiltrating their platforms,” according to The Hill.

Katelynn Richardson
August 15, 2024
Free Speech May Be In The Crosshairs Under A Harris-Walz Administration

Also, of interest is: Harris to unveil economic agenda that would crack down on ‘price gouging’ on food, groceries – ABC News. And it is not just food she wants the government to meddle with:

Among the economic policies Harris is set to announce is a plan to provide up to $25,000 in down-payment support for first-time homeowners, according to a campaign official.

The campaign is vowing that during her first term, the Harris-Walz administration would provide working families who have paid their rent on time for two years and are buying their first home up to $25,000 in down-payment assistance, with more generous support for first-generation homeowners.

She will also call for the construction of 3 million new housing units to end the housing supply shortage, her campaign said.

Among the economic policies Harris is set to announce is a plan to provide up to $25,000 in down-payment support for first-time homeowners, according to a campaign official.

The campaign is vowing that during her first term, the Harris-Walz administration would provide working families who have paid their rent on time for two years and are buying their first home up to $25,000 in down-payment assistance, with more generous support for first-generation homeowners.

She will also call for the construction of 3 million new housing units to end the housing supply shortage, her campaign said.

This is total disregard for specific enumerated rights and powers. The constitution? We don’t need any stinking constitution!

BRICS Gold-Backed Currency to Launch at 2024 Summit?

Game changer:

BRICS aims to launch a new currency that will be backed by gold as a counter to the US dollar. A common currency will make the alliance usher into a new financial era and become a cornerstone for further developments. The upcoming summit in 2024 will shed more light on the policies that are aimed to topple the US dollar.

We live in interesting times.

Federal Deficit Versus GDP

The national debt is over $34 trillion. It’s time to tell the truth about the U.S. government’s finances (msn.com)

This catastrophe has been a long time in the making. In 1993, for instance, the annual deficit amounted to 3.8% of GDP, and the debt, which seemed astronomically high at a “mere” $4.4 trillion, was Lilliputian by today’s standards.

The trend goes back longer than that. The growth of the U.S. government in modern times is the story of post-WWII America. President Dwight Eisenhower seems to have been the last guy in the post-WWII era who understood that the welfare state, the warfare state, and tax cuts not backed by tough spending cuts are incompatible with fiscally responsible government, or at least with reasonably-sized government. His predecessor, Harry Truman, who had funded the Korean War effort, left Eisenhower a level of federal spending equivalent to 18.5% of GDP. Between then and now, both parties, with short-lived exceptions, have pushed both the defense and domestic budgets exponentially higher.

Lyndon Johnson took spending to 19.6% of GDP; Richard Nixon and Gerald Ford to 21.5%; Jimmy Carter to 21.8%; George W. Bush to 21.9%; Barack Obama to 24.9% (before bringing it back to 21.9%); Donald Trump to 31.3% (during the COVID-19 meltdown), and Joe Biden to 31.7%, although now it has come down to 22%.

It’s now come down to this. Unless a new generation of leaders has the courage to cut such “untouchables” as the defense, education, justice, and homeland security budgets, and privatize the Social Security program (as more than 40 countries wisely have done), sooner or later, the current trajectory of federal finances will lead to an extremely ugly place. If you think things are bad now, just wait.

I need an underground bunker on a farm in Idaho.

Quarterly Debt Interest Payments of $1 Trillion

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Dimon recently stated that stagflation was unavoidable for the United States. Therefore, he predicted that high inflation and unemployment would be a massive concern for the country. That is a dire statement, as the employment figures have been a stabilizing factor in the US economy amid its two-year inflation fight.

The pressure of these impending realities is only made more concerning with government spending continuing to grow. The US quarterly debt interest payment has recently surpassed the $1 trillion mark. That details the incredible global concern regarding the continued viability of the US dollar as a reserve asset.

Joshua Ramos
May 30, 2024
BRICS: JPMorgan Forecasts Unavoidable Crisis for the US Dollar (watcher.guru)

See also U.S. Reacts To BRICS De-Dollarization Agenda.

And don’t forget the country is adding $1 Trillion in Debt Every 100 Days as well.

We live in interesting times. Prepare appropriately.

It Will Not Be Gradual

Privately I have been talking about the collapse of the dollar since at least 2008. So much so that people sort of roll their eyes when I mention it these days. They don’t use these exact words, but it amounts to, “You have been saying this sort of thing for 15 or 20 years now and nothing has really changed. Why should anyone worry now?”

I have asked financial advisers if I am crazy thinking this is something to be concerned about. They don’t seem to think I’m crazy, but they never give me advice which would appear to take these concerns into account.

These concerns are why I watch the price of gold so closely. My hypothesis is that a rapid increase in gold price will be an indicator that “the end is near”. And my model is that once nearly “everyone” realizes the end is near the collapse will be scary fast, perhaps in weeks or days.

This may be another indicator:

BRICS: China Dumps The Largest US Treasuries in History

BRICS member China dumped a record number of US treasuries and agency debt bonds worth a staggering $53.3 billion. Historically, this is the largest sell-off initiated by China ever recorded and occurred during the first quarter of 2024.

China and other BRICS countries have been offloading US treasuries worth billions since 2022. The Communist country has a record of dumping the highest in the last two years. The development indicates that BRICS and other developing countries want to move away from owning US assets in their reserves.

The uncontrolled debt of $34.4 trillion is worrisome making BRICS rely on local currencies and not the dollar. In addition, even a close ally of the US, Belgium dumped $22 billion worth of treasuries during the same period. This shows that even European nations are beginning to distance themselves from the US economy, including selling off bonds and treasuries.

Prepare appropriately.

Bullet Wordcraft

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Today the currency is in dollars. Soon it could be in bullets. With the threat being hyper-velocity instead of hyper-inflation.

MTHead
June 1, 2024
Comment to Hyper Inflation May Be Avoided.

It will take more to convince me this is plausible in the near future. But I like the wordcraft.

And I want an underground bunker in Idaho just in case.

Hyper Inflation May Be Avoided

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This contrarian sees a strong consensus around the notion that hyper-inflation is the inevitable end-game of nation-states / central banks issuing fiat currencies, i.e. currencies that are not restrained by being pegged to tangible assets such as gold reserves. The temptation to issue (via “printing” or borrowing new currency into existence by selling sovereign bonds) more currency becomes irresistible to politicians and central bankers alike. as the means to mollify every constituency, from elites to the military to commoners dependent on state-funded bread and circuses.

This unrestrained creation of new money far in excess of the expansion of goods and services (i.e. the real economy) devalues the currency, as “all the new money chases too few goods and services.” Gresham’s law kicks in–bad money drives good money out of circulation–as precious metals, fine art, gemstones, etc. are hoarded and the depreciating currency is spent as fast as possible before its purchasing power declines even further.

The Cantillon Effect also kicks in: those closest to the spigot of new money get first dibs on converting the depreciating currency into tangible goods, leaving the non-elites to sweep up the “trickle-down” shreds left as the currency loses purchasing power daily.

The consensus holds that there is no way to stop this decay of purchasing power to near-zero, i.e. hyper-inflation, once it starts. As in a Greek tragedy, the fatal flaw of the protagonist–in this case, fiat currency–leads inevitably to its destruction.

In the real world, things having to do with money tend to occur because they benefit powerful interests. This leads us to ask of hyper-inflation: cui bono, to whose benefit? Exactly which powerful interests benefit when a currency’s purchasing power plummets to near-zero?

Charlies Hugh Smith
May 27, 2024
Of Two Minds – Is Hyper-Inflation that Destroys a Currency a “Solution”?

Emphasis in the original.

I found his alternate version of things may turn out intriguing. But as I read his post I became more and more concerned with the question, if things will go a different way because of the “powerful interests” will steer it to something to their advantage, then why has there ever been hyperinflation? Wouldn’t those “powerful interests” have taken those previous (except perhaps the first example of hyperinflation) instances down a different path?

Still, something other than hyperinflation as the reset button is something to consider and prepare for.

You Have Ten Years or Less

I don’t have much confidence in economic forecasts, but here is one anyway:

Here’s why economists are so worried about soaring US debt levels (msn.com)

Technically, the government could print money to pay off its dues, but that would result in hyperinflation as the money supply skyrockets.

Robust economic growth can make debt more sustainable, but the debt is growing way faster than the economy — the national debt balance rose 86% over the last decade, while GDP grew by 63%, according to Fed data.

Economists are uncertain of when exactly the national debt will become a true problem for the US. If the pace of borrowing doesn’t slow, Rubin anticipates a crisis of some sort materializing within the next decade.

“It starts slowly and then it accelerates rapidly. Right now I don’t think anything is imminent. I would say we have 10 years or less to fix this problem. I think that may be the optimistic scenario,” Rubin said.

I question how he, or anyone can put a number on this. Perhaps by comparison to other nations with similar problems but that doesn’t take into account things like the U.S. Dollar being a reserve currency, the state of our technology development. After all, where is the case history where there was no need to physically print the money, the government could just change a few 1’s and 0’s in a computer file someplace.

It was about 15 years ago that Chet and I started talking about the imminent risk of U.S. hyperinflation. And it still hasn’t happened. How many times does one get to cry “wolf” before no one listens to you any more?

Still, ten years or less? You and I might be able to build our underground bunkers by then.

Debt Jubilee? No!

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A debt jubilee is certainly appealing to debtors and those who see the cliff ahead, but recall that all debt is an asset that is holding up an asset class far larger than the debt itself: mortgage debt is what props up the entire global real estate market, and what happens to valuations when debt ceases to exist?

Those who see jubilee as a solution also tend to ignore that all this debt is an asset of which 90% is owned by the wealthy class who run the status quo. Every bond, every mortgage-backed security and every bundled student loan / auto loan is an asset owned by someone or some entity who depends on that asset and its income stream for their wealth and thus their political power.

To hazard a guess based on human history, the wealthy / powerful will probably not be too keen to surrender the vast majority of their wealth and thus their power in the laudable pursuit of eliminating all debt and starting over.

CHARLES HUGH SMITH
April 19, 2024
Living on Uneasy Street

Emphasis in the original.

I see the only way out of things is for hyperinflation to “cancel” both private and government debt. Hold on, it is going to be a bumpy ride.

Prepare appropriately.