OASIS FORUM Post by the Golden Rule. GoldTent Oasis is not responsible for content or accuracy of posts. DYODD.

David Rosenberg interview= Gold demand is predicated on the final act which is going to be right-out debt monetization.

Posted by Richard640 @ 0:39 on January 18, 2020  
Where else do you spot opportunities?
Gold is inversely correlated with either near zero rates, zero rates, or negative rates which makes it an ideal investment. Mark Twain coined the phrase “Lies, damned lies, and statistics”. But the thing about charts is that they don’t lie. Gold went through a long-term, multi-year basing period. Now, it has broken out and the chart looks fantastic. Also, gold is no country’s liability. For example, in the United States M2 growth is running at double digits. So when you compare the new supply of gold against the supply of money coming into the system from Central Banks, to me it’s a very clear cut case that you want to have very high exposure to bullion.
You’re predicting that the gold price will surge to $3000 an ounce. What are the fundamentals your forecast is based on?
It’s just a matter of when, not if.==When we get to the lows of the next recession, we’re going to find that these Central Banks that already have been extremely aggressive are going to engage in what is otherwise known as the “debt jubilee” or a right-out debt monetization which was actually the final chapter of the Bernanke playbook. Remember, Ben Bernanke got his nickname “Helicopter Ben” because in a speech in 2002 he suggested that helicopter money could always be used to prevent deflation. So we’re going to have helicopter money.
That doesn’t sound very encouraging.
Would you ever have thought that, at or near the peak of this cycle interest rates would be at the lowest level since the 1500s? Just imagine what happens to monetary policy in the next downturn.
What do you think?
This debt morass has been the principal reason why – notwithstanding how wonderful the stock market has done – this has been the weakest global expansion on record. What happens in the next recession is that the cash flows to service that debt are going to become significantly impaired and we’re going to get a destabilizing default and delinquency cycle. I know, that sounds absolutely horrible, but we’ve hit the end of the road on negative interest rates, and we’ve really hit the end of the road on quantitative easing. So the Central Banks are going to go into a new, non-conventional toolkit called debt monetization. They will lose control of the monetary base and then we will go into a situation where, even with technology and with aging demographics in the industrialized world, we will be talking about inflation again. That might come in the next 18 to 24 months, and gold is going to skyrocket.

No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.

Go to Top

Post by the Golden Rule. Oasis not responsible for content/accuracy of posts. DYODD.