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Gold to $5000? From Bloomberg.com Yesterday

I ran across this interesting article today on Bloomberg:

Gold May Rise to $5,000 on Inflation, Schroder Says

He is talking about a dramatic rise in gold prices as people move their wealth from the stocks and bonds into precious metals to preserve the value of their portfolios.

From the article:

The limited amount of gold available, relative to the size of the global capital markets, means a small shift in investments may lead to significant price changes for the metal, Wyke said. Total gold above ground is worth about $4.8 trillion, compared with global stock and bond markets worth $135.2 trillion.



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outrageous

gold will be $2000 before it'll be $4000 before it'll be $5000.
(but it's not impossible, I am not parroting Zeno's BS paradox)

by then, people will wake up, havoc will wreak and the Fed Res will do something to balance the books to prevent a spike.

in it were true, it probably won't be legal to own gold, or it won't last long.

Infusion of Funds

Of course gold will go up in price over time, but the point of the article is that there are indications that the rise could be very dramatic. As I pointed out in the quote, there is $135 trillion dollars in stocks and bonds around the world. If just 10% of that money were moved to gold, that would be almost 3 times the total money invested in the gold right now. The $5000 figure is just used to put it into perspective -- a huge change in valuation is very possible even without hyper-inflation.