http://www.bi-me.com/main.php?id=38821&t=1&c=62&cg=4&mset=
Gold is ultimate store of value for a discredited dollar, says Peter Schiff
Author: BI-ME staff
Source: BI-ME
Published: Fri July 10, 2009 4:12 pm
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INTERNATIONAL. Renowned Wall Street financial forecaster and economist Peter Schiff, the president of investment firm Euro Pacific Capital and author of ‘Bull Moves in Bear Markets’ said gold prices are poised for a “spectacular” and prolonged rally as the recession deepens and investors finally become disillusioned with the US dollar.
Schiff, who warned of the October 2008 stock market crash and accompanying recession as far back as 2006, has predicted a gold price of US$2,000, and rising as high as US$5,000 as inflation takes hold.
Speaking at a recent interview with Business News Wire, Schiff suggests that the looming prospect of a hyper-inflationary environment in the US will severely debase the US Dollar over the next few years.
“The global investment community will realise that gold represents the ultimate “store of value” as a safe haven replacement for a discredited dollar,” Schiff said.
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“The only solution to the economic problems that we have today is a return to sound money… The world is ultimately going to have to move away from the ‘Dollar Standard’ and back their currencies with something real. I think gold is the best thing to use. Gold has been money for 5,000 years,” he said.
“One of the reasons that gold isn’t stronger is because of this temporary strength of the dollar. This is keeping the gold market in check. And the dollar is getting some of the safe haven money that should be going into gold,” Schiff added.
“At some point that will stop. The people who are buying dollars will realize that there’s no safety in dollars. Because the central banks are going to try to pay for the economic bailouts and stimuli by looting the world’s savings and by printing money and debasing it.”
“So, if you want to escape that, you hold gold, which is something that the government cannot debase,” he concludes.
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Music to a Gold Bug’s ears.
The implication of 5k$ gold is that inflation as measured in dollars is 400%. That translates to a gallon of gas is $16, a package of hot dogs is $10, and a six pack of cheap beer is $20! Makes Frau’s social security check and my pension a lot lot smaller!
On the positive side, it makes it much easier to pay off the 11T$ “national debt”. But, how do you think the Chinese will feel holding 5T$ of diminished purchasing power? Not too happy!
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Reinke Faces Life 