Money printing from the world's central banks will all need to come together as one, to prevent the major economies of the world from imploding. Events such as high unemployment world-wide could be a trigger to set off the printing presses. One sharp example here is unemployment numbers. Within many countries real unemployment rates are 25% with 50% for youths.
In America if you are not misguided by the main stream media and the governments "official unemployment estimates, you would find real unemployment within America at 23 percent. Alone, these statics suggest a ready made recipe for an economic global disaster. Currently it seems the world is not yet suffering enough high unemployment to cause the central bank printing presses to go berserk.
Once the trigger event happens all the central banks will ban together and let the printing presses run non-stop. The excessive buildup in the worlds currency supply will be enormous compared to the already enormous over-supply of currency already in existence. Inflation will mount tremendously and in the end, allow currencies all over the world to collapse. By now, a huge on-rush of gold buying will occur, regardless of its market price.
Here is the Kicker!
These huge banks, including the central banks don't have the gold reserves in their vaults that they claim. In no way could they satisfy their gold commitments should they be demanded too. While the Fed claims to have almost 8,000 tons of gold in their vaults and the IMF 3,000 tons chances are extremely high these two banking entities hold far less than what they claim.
Bottom-line this will become a problem. A problem that will generate a loss of confidence in the currencies. Once this happens people will be rushing in to buy gold regardless of its price. An important note here to understand; "A loss of confidence in a currency in the end, destroys it". This has happened with every fiat currency ever created throughout history. It is absolutely plausible to see the gold price rising between $3500 to $5,000 within the next 12 to 18 months.
Currently the silver/gold ratio could be at its top 58-59:1 and start falling once again. Silver in the end, still is poised to outperform gold. Silver within the next several months should take-off and start to approach its $50.00 highs. Within the next 12-18 months silver will be reaching far higher. Looking further ahead it's plausibly to see the gold price at $10,000 an ounce with silver following the ride up.
In the end, where just about any asset class imaginable is going to disintegrate, hard assets such as physical gold and silver will be two of the last men standing. The key is to hold physical gold and silver (no paper assets such as gold or silver futures or ETF's) outside the world's banking systems where there is no counter-party risk of any kind.
Tom Genot -
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