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There are many ways to observe gold, particularly through the lens of classical economics, supply and demand, debasement of currency, etc...
But there is another factor - Sovereign involvement. I have often spoken of parabolic gold - but it's rise to such heights will unlikely occur without sovereign involvement - i.e. really deep pockets, and national security motives.
James Rickards is a consultant to the US Defense Industry. He frequently writes about "threat finance."
I won't summarize this paper - in my view, it's a must read. But in it, you will be able to envision a world where gold surpasses 5K, or even much, much higher. But it won't be pretty.
Here's a blurb:
The example below hypothesizes a single country, Russia, acting unilaterally to require that all of its exports (principally oil and natural gas) henceforth be paid for in a new gold-backed currency issued by a newly formed fiscal agent of the Central Bank of Russia based in London. However, variations on this plan can easily be imagined, including a joint announcement to similar effect by Russia and China or an even larger group under the auspices of the Shanghai Cooperation Organization and in affiliation with Iran.
Here it is, I'm sure the wonkish types that dwell here will enjoy it:
http://www.au.af.mil/au/ssq/2009/Fall/rickards.pdf
(FYI - Rickards tweeted this link recently - that's how I found it, and yes, that's a military domain. Looks like the military is being consulted on internal and external financial threats - with a gold standard being mentioned. Granted, this does not mean anything concrete, US Government institutions get all sorts of papers and views - nonetheless, I find this very compelling. Maybe EJ can interview Rickards one day?)
But there is another factor - Sovereign involvement. I have often spoken of parabolic gold - but it's rise to such heights will unlikely occur without sovereign involvement - i.e. really deep pockets, and national security motives.
James Rickards is a consultant to the US Defense Industry. He frequently writes about "threat finance."
I won't summarize this paper - in my view, it's a must read. But in it, you will be able to envision a world where gold surpasses 5K, or even much, much higher. But it won't be pretty.
Here's a blurb:
The example below hypothesizes a single country, Russia, acting unilaterally to require that all of its exports (principally oil and natural gas) henceforth be paid for in a new gold-backed currency issued by a newly formed fiscal agent of the Central Bank of Russia based in London. However, variations on this plan can easily be imagined, including a joint announcement to similar effect by Russia and China or an even larger group under the auspices of the Shanghai Cooperation Organization and in affiliation with Iran.
Here it is, I'm sure the wonkish types that dwell here will enjoy it:
http://www.au.af.mil/au/ssq/2009/Fall/rickards.pdf
(FYI - Rickards tweeted this link recently - that's how I found it, and yes, that's a military domain. Looks like the military is being consulted on internal and external financial threats - with a gold standard being mentioned. Granted, this does not mean anything concrete, US Government institutions get all sorts of papers and views - nonetheless, I find this very compelling. Maybe EJ can interview Rickards one day?)
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