Why Gold Will Rise to $50k to as much as $500K per Ounce

[Mn_Mark]

...and that's in inflation adjusted terms!


A little "gold porn" for those who hold physical gold and like to think about what price might be reached...here's a few paragraphs:

And the realization that I have personally come to is that the market wants to recapitalize the world, default some of the global debt and settle the rest of it after recapitalization. This is not a human-managed restructuring I am talking about. It is "the mountain coming down" via gravity. So in very rough terms I am looking for the worst transgressors to have to part with roughly half of their gold after revaluation. This will leave them with enough real capital to rebuild within the new, emergent meritocracy... the reluctant state of “Accidental Virtue”.

So the point of this post, what I hope will sink in, is that the future "inflation-adjusted" price of gold, the price in TODAY'S dollars, can literally be anything. Forget ratios. Forget technical analysis. Focus only on the debt! And this epiphany... this realization... this discovery... should be enough to convince anyone to get on the receiving end of this "very unfair" transfer of wealth. Actually, fair or not matters little. What else is fair in this world? Seriously. I am not here to pass on my moral fortitude, only to share my observations and understanding.

And here is the definitive issue. Does gold's "future price" need to suffice at a "gold window" in exchange for dollars? No. So does it need to relate to the $5T in existing monetary base? No. Does it need to credibly establish convertibility with all existing debt? Yes! And how much of the world's gold needs to establish this credibility? All of it? The stock... the flow? The answer is that the global stock doesn't matter. And present flow is irrelevant. What matters most is future flow and the existing stock of the biggest debtors. This is the incalculable calculation that will lead you to the future price of gold.

I put it most likely around $100K, but at least somewhere between $50K....

http://fofoa.blogspot.com/2010/05/reflection.html

[Jay]

Re: Why Gold Will Rise to $50k to as much as $500K per Ounce

Wait jtabeb didn't start this thread?

[Chris]

Re: Why Gold Will Rise to $50k to as much as $500K per Ounce

i think gold with rise to $1 million dollars an ounce! Seriously, why do people bother making these predictions?

austin_powers_mike_myers_as_dr_evil.jpg

[ViC78]

Re: Why Gold Will Rise to $50k to as much as $500K per Ounce

Wow! This is being to sound like the DOW 36K proclamations during the dot com boom.

[grapejelly]

Re: Why Gold Will Rise to $50k to as much as $500K per Ounce

Wow! This is being to sound like the DOW 36K proclamations during the dot com boom.

nothing to celebrate. It's the consequence of currency depreciation...

[gnk]

Re: Why Gold Will Rise to $50k to as much as $500K per Ounce

I've said it already in other threads. I think it most likely that gold becomes money - either it backs the currency, or is money i.e. you exchange your gold at the bank for money.

Should that happen - you divide gold reserves by money supply - depending on how you count money supply - $10K - 20K an ounce is not far fetched.

Debts are finally wiped out with redeemable currency. If you don't know the difference between a redeemable currency, and iredeemable currency - you're not seeing the whole picture or understanding a good part of the reason for this global financial crisis, IMHO.

[Miin]

Re: Why Gold Will Rise to $50k to as much as $500K per Ounce

Read the blog, it one of the most read gold blogs in the world and with good reason. There are very little people in the world who have such a grasp on the whole financial issue as FOFOA. And no I don't know if we should go by those numbers ... aside from that, read the blog, all of it.

[jtabeb]

Re: Why Gold Will Rise to $50k to as much as $500K per Ounce

No, that GUY (JTABEB) is a total LOON! (the fact that he beat the Itulip model portfolio by +400% since inception is just DUMB LUCK!) ;)

Now please note that the perormance delta falls to +260% on an after-tax basis, but still...

(Disclosure, I'm jtabeb, and I'm a PM-aholic;))

I'm done buying PM's, however. I have enough (I still have to buy one more ounce, just to hit a round number, but after that, I DONE).
I'm NOT selling any PM's mind you, but my allocation is such that I think there are other opportunities out there. All my portfolio additions from here on out will be in the Alt-E sphere. Not anything and everything, but carefully selected, well researched, and targeted plays.

If you are comfortable with your physical PM allocations, NOW is the time to look for and allocate to select Alt-E plays. I'm going to diverge again from the Itulip model portfolio that EJ has and I'm going to completely BYPASS traditional energy plays like Oil, Nat Gas, and Coal. My assessment is that there is MUCH MORE GROWTH potential (with lower volitility, but much HIGHER risk) in the Alt-E sphere, than in the traditional energy sphere. I think that both spheres are winners, but that Alt-E is LIKELY to vastly OUTPERFORM on a relative basis. And, I also see a transition taking place (within a decade) or so.

I've repeatedly made the claim that exisiting technology, and technology in development can solve our energy problems. I'm EVEN more sure, after having attended day 1 of the USAF energy Forum III in Washington D.C. (we wrap-up tomorrow).

http://usafenergyforum.com/

Our Government is doing absolutely AMAZING things in the field of alternative energy research. It looks like the military is the test bed for commercialization for most of these technologies. We can try MORE THINGS, make changes faster with less risk, and serve as a bootstrap to commercialization. The military, working with academia, industry, and finance, can bring these solutions up to usable level as a prelude to widespread commercial adoption. Think of the spill-over of GPS technology to commercial civil aviation after it was already in widespread military use. This is JUST like that, but in the field of energy, not navigation.

Buckminster Fuller once said that we would have to find our critical path in order to be able to succeed in a resource constrained environment. I'm not saying we are there by any means. But I will say that I have as much hope and excitement about developments in the Alt-E field as I have exactly the opposite emotions as applied to the prospects of Financal reform. And quite honestly, I think that this is much more important than financial reform at this point. (Yes, I DID JUST SAY THAT).


I will say this. If we were doing as well in Finance as we are in the Alt-E sphere, most of our problems would be solved. (No, I mean it! I've been exposed to some really incredible stuff).

I hope to have some kind of trip report that I can share in the select forum after the conference, I'll let you know.


I'll leave you all with this thought: I have a POSITIVE outlook on our growth prospects based on this. (Yes, I just said that TOO!) What's that tell ya?

[Starving Steve]

Re: Why Gold Will Rise to $50k to as much as $500K per Ounce

No, that GUY (JTABEB) is a total LOON! (the fact that he beat the Itulip model portfolio by +400% since inception is just DUMB LUCK!) ;)

Now please note that the perormance delta falls to +260% on an after-tax basis, but still...

(Disclosure, I'm jtabeb, and I'm a PM-aholic;))

Forecasts of $50,000 to $500,000 U.S. for an ounce of gold are themselves: a sell signal. [Sic,] "What is a tulip bulb worth?"

[jtabeb]

Re: Why Gold Will Rise to $50k to as much as $500K per Ounce

steve, you need to re-read the post. I got done editing and had a lot more to add.

[c1ue]

Re: Why Gold Will Rise to $50k to as much as $500K per Ounce

Our Government is doing absolutely AMAZING things in the field of alternative energy research.

If you can, post some of these observations.

I see almost everything to goes by in the civilian side due to my history with the semi equipment folks. These folks also provide the hardware which creates the satellite solar, so again am very curious where this radical game changing technology is coming from.

Note that I am not gainsaying that the US military isn't technologically advanced - it absolutely is.

But technological advancement is a FAR cry from economically competitive. The whole problem with fossil fuels is exactly that they are so damn cheap. Satellite grade solar, for example, is extremely efficient and durable. It also costs 10X to 100X that of present available equipment without a similar performance improvement.

Given that the US military no longer owns its own fabs nor makes its own equipment, I am incredibly curious how this research is done.

In fact, I had the privilege of working with the group that used to be the Westinghouse fab/design team. Very smart guys, but no longer in the government sphere with their hardware long since (20+ years) 'outsourced'.

[jtabeb]

Re: Why Gold Will Rise to $50k to as much as $500K per Ounce

It's not radical suff, it's the scope and the SCALE that's really impressive. Esp so. with the effiency efforts. I did not see anything that I had not know about before hand. It was the DRIVE to make this really stuff happen that was so impressive.

[jtabeb]

Re: Why Gold Will Rise to $50k to as much as $500K per Ounce

I'll have you know today I just saw Satellite grade solar with 40% eff (for terrestial use) at only 4x the cost of presently available tech. SAW it, not read about it, as in fielded suff. They are talking about going to 45-50% eff and moving down to a 2x cost factor. That's the kind of stuff I'm talking about that get's me excited. This is here and now stuff (the 4x cost and 40% eff, anyway). AND I saw a broad coalition of competent agencies and individuals dedicated to makeing this a reality in the next 10 years.

I was (and am) very impressed.

[gnk]

Re: Why Gold Will Rise to $50k to as much as $500K per Ounce

I'll have you know today I just saw Satellite grade solar with 40% eff (for terrestial use) at only 4x the cost of presently available tech. SAW it, not read about it, as in fielded suff. They are talking about going to 45-50% eff and moving down to a 2x cost factor. That's the kind of stuff I'm talking about that get's me excited. This is here and now stuff (the 4x cost and 40% eff, anyway). AND I saw a broad coalition of competent agencies and individuals dedicated to makeing this a reality in the next 10 years.

I was (and am) very impressed.

I agree that's impressive, and I'm sure that technology will improve.

However, other than (so far) low cost, fossil fuel used in transportation has another benefit -it's energy dense and portable. When we discuss solar, wind, and hydro - how do you transport that energy to the vehicle? You need a battery - but is battery technology up to par? Are there any long term resource constraints in the mass production of EV batteries? Maybe someone else can chime in.

[Starving Steve]

Re: Why Gold Will Rise to $50k to as much as $500K per Ounce

I'll have you know today I just saw Satellite grade solar with 40% eff (for terrestial use) at only 4x the cost of presently available tech. SAW it, not read about it, as in fielded suff. They are talking about going to 45-50% eff and moving down to a 2x cost factor. That's the kind of stuff I'm talking about that get's me excited. This is here and now stuff (the 4x cost and 40% eff, anyway). AND I saw a broad coalition of competent agencies and individuals dedicated to makeing this a reality in the next 10 years.

I was (and am) very impressed.

I am NOT impressed with solar, and certainly not impressed with its promises nor its economics.

One minature reactor from Los Alamos Lab in New Mexico would provide my community, East Sooke, British Columbia with enough electric power to light-up 20,000 large homes. The cost of such a mini-reactor would be $50 million for every 7 to 10 years, or about $21 per month per house over the period. In other words, the capital cost of the mini-nuke would be $3 per month per household. The power would otherwise by free, so if we collected one penny per kwh for the power, we would have a huge revenue stream coming in to keep the utility poles and lines in good shape.

Please compare this to solar. What a joke and a sad dis-appointment solar and wind and tidal power have been! My electric bill in BC from BC Hydro is running about $80 per month for a 1280 sq. ft. log cabin that is insolated to double-code.

http:www.hyperionpowergeneration.com

I would trade $21 per month for my $80 per month electric bill, any day. And the mini-power plant could be housed on my land and serve all of the communities west of Victoria, BC.

Imagine, we could turn-on our electric baseboard heaters and have heat that is penny-cheap again, just like in the 1950s! Imagine, we could do electric cooking again, without the fear of what our electric bill might be at the end of the month! Imagine living life again with the simple pleasure of inexpensive heat in British Columbia! One could just turn a dial for heat, and one would no longer have to carry cut-wood and split-logs into the house for heat--- during all hours of the night and in all kinds of weather.

Double-click the link above. Teachers, please make copies of this and discuss this with your kids. We need to throw the pot-heads out of BC who led us down this path of freezing in the dark and dreaming about solar energy promises.... Good ideas just get better-looking the more you look at them, and mini-nuclear looks better and better, from every angle.

Another bonus with mini-nukes is that U235 is available free from the Rocky Mountain Weapons Lab in Boulder, Colorado. Un-needed atomic weaponry could be de-commissioned, and the enriched U235 taken-out (harvested) free-of-charge. This would help to rid the world of atomic weaponry and solve the problem of disposing of the enriched uranium in such weapons. ( Everyone wins with a good idea and this solution. )