Welcome to illuminati silver we tell you the
truth about silver. Today is Tuesday 29th November 2016 and we
are discussing the case for $10,000 Gold. All of us have seen on the Internet a number
of gold and silver pumpers stating that gold is about to rise to $10,000 any time soon.
Some have said $5,000 and we have even seen one stating $50,000. Even some of our subscribers
quote gold will reach $10,000 in 2017 or 2018 and we wondered where have these figures emanated
from as our analysis based on fundamentals stress that $2,000 gold would be quite an
achievement at that time. Well apart from those making outrageous claims
like Bix Weir who argues the case for $100,000 silver, yes you’ve heard it correctly $100,000
oz silver – with a set of conditions less likely to occur than someone winning the State
Lottery three times in a row we have managed to identify the real advocate of this prediction
who happens to be a serious economist and financial commentator.
Now we are confident that most of our listeners have heard of him, and we have mentioned him
in the past – his name is Jim Rickards who has penned numerous New York Times best sellers
on the relationship between commodities and currencies.
His latest book, “The New Case for Gold,” defends the rationale that gold always has
been, and always will be, a true safe haven during volatile times. He therefore urges
investors to think of the commodity as insurance, but not an investment.
He frequently cites the financial meltdown of 2008, where U.S. banks teetered on the
brink of collapse before the government’s multi-billion dollar bailout. Before that,
in 1998, Wall Street bailed out Long-Term Capital Management when it collapsed.
Rickards explains that, financial panic seems to occur every 10 years, and therefore investors
should brace for another disaster in 2018. Yet, this time around, Rickards believes that
it’s the U.S. government itself that may trigger the next crisis.
This is what he said recently on CNBC : “We should expect the next global financial
panic soon. We have imploded twice in the last 16 years so get ready for the third one…..
In 2018, who’s going to bail out the Central Banks?…..The bailout money is going to come
from the IMF [International Monetary Fund] as they have the only clean balance sheet
left.” Rickards argument is based upon the fact that
in 1998 Wall Street bailed out Long Term Capital Management. In 2008 the FED bailed out the
Banks. During the next crash, only the IMF is large enough to bail out the Central Banks
and Governments. Rickards believes that this will drive gold
higher—to $10,000. He states: “This sum is not a made up number….. It is the implied
non-deflationary price.” Rickards points to “M1,” the base money supply
printed by the Federal Reserve plus active checking accounts. The value of M1 is derived
in large part from the value of gold and represents the day-to-day money supply that people can
use to spend. He explains:
“Global M1 has about 40 percent gold backing. There’s about 35,000 tons of official gold
in the world. That comes out to about $10,000 an ounce to use gold to create confidence
in the dollar…..the dollar price of gold moves around, but gold itself stays constant.”
Rickards’ scenario, of course, is a hypothetical value based on a number of theoretical occurrences
that would need to happen in the global economy. Much of it is based upon continuing global
conflicts which may peak. For example he quotes: “Look at the South China Sea! Look at the
Middle East, Libya and Iran…….The system is not stable. ”
He also references that the FED, over the next 12 months or so will ease up on liquidity
rather than the tightening, markets are trying to predict – resulting in a weaker dollar
and a higher price for gold. The last few days, Rickards has been interviewed
a number of times, as he has yet another new book to promote. He believes that Trump will
attempt to spend his way to economic growth which could lead to inflation. He also highlights
that if the IMF is eventually called in to rescue Central Banks, then, the SDR (Special
Drawing Rights), which would be the currency the IMF would use to bail out individual countries,
would have to instil confidence and to do this will comprise of a certain percentage
of gold and this will ignite its price. So what do we make of this? Well, there are
conflicting aspects. If the world moves towards a pure digital currency economy, then one
has to ask what is the place for gold other than just its ornate beauty in jewellery and
black market trade. Bitcoin for example is backed by nothing other than a limited number
being available and the security of its operation, and so something similar could theoretically
be created or bitcoin expanded on a total global scale without the need for gold.
On the other hand of course, to achieve such a digital currency that is global, will take
a number of years to implement, during which time, many believe the financial crash will
have already occurred and there will be a flight to gold.
Let us assume the latter scenario happens. The flight to gold will be a mixture of monies
moving out of stock markets, possibly bonds and property into precious metals. However,
the currency markets will implode and the value of the dollar will depreciate significantly
and of course the value of gold goes up in dollar terms. That said, and Rickards points
this out, you could very well have $10,000 gold in that scenario, but rather than making
you rich, that $10,000 will still only buy you the same as $1,000 will buy you today.
So what gold will in effect achieve is that rather than make you wealthy, it will protect
your purchasing power while those who do not hold gold will be unable to do.
On that basis, this supports what we have said all along. Do not buy gold and silver
in the belief that it will make you wealthy. Do so in that it will protect your purchasing
power when others do not have that protection. Of course, should a financial crisis not occur,
and the precious metals are not actively sought after, then a 5% – 10% holding of your assets
in gold will not do you any significant harm. If on the other hand, you believe the pumpers
are right and that Rickards forecast and timing is correct and you decide to go all –in,
then heed this caution – your prosperity will then be dependent upon economic collapse
(which will have a range of other unpleasant consequences) or if there is no collapse,
you may be holding on to it for many years to come – so be prepared in more ways than
one. Having said that, we do see gold and silver
providing a little more than just currency protection during the course of the next 20
years. At some stage, gold and silver will be seen as an attractive investment opportunity
over and above just holding monetary value. The same will apply to houses, to stocks,
to bonds etc. Longer term, we foresee silver being not only in great demand, but more expensive
to extract as the mines become deeper, thereby ensuring an attractive appreciation in price.
However, we do not believe for a moment that by jumping in with both feet is sensible unless
of course you are an all-out gambler and can afford to do so.
By the way, at the time of producing this video, gold currently stands at $1184 and
silver at $16.50 oz. We hope you have found this video interesting
and informative and if so, please give it a thumb up and share it on twitter. Also kindly
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is updated daily can be found at facebook.com/illuminatisilver Disclaimer: Illuminati Silver owners come from a background
of Banking, International Wealth Management and Economics. Having now retired from these
worlds we are not qualified to give investment advice. Therefore, this and other productions
must not be deemed to be giving such advice and merely represent the personal views of