Remarkable Roadmap for Gold

If the gold market gets revalued and becomes part of an international basket of currencies, where does gold have to be re-priced, just looking at the mess we have today?”

Williams: “I’ve seen some really credible work from guys like Paul Brodsky and Lee Quaintance that makes the case for a $10,000 gold price and makes it effortlessly…

I’ve seen similar people talking about $5,000. You can really make a case, depending on the level of backing that they (central planners) want to put around this, for anywhere from $5,000 to $10,000. But in principle it could be a lot higher than that.

We don’t know what state the world is going to be in by the time something like that might happen. Who knows how many more trillions of dollars are going to have been printed by the time these guys finally give up this attempt to ‘magic’ money out of thin air and save the world?

But $5,000, $10,000, $15,000, $20,000 gold, none of those numbers would cause you to raise an eyebrow if you actually sat down and ran the numbers. The question is, what’s the system they are going to set up to try to bring gold back into the fold (of the global monetary system)?

There are reports out this week that the BRICs are going to set up their own version of the IMF and their own BRICs Development Bank, which would be very, very interesting. And all of these little things: The amount of trade now being done in yuan directly between the Chinese and their various trading partners, all of these various currency swaps that are being signed, it’s all a move away from the dollar.

I don’t think the Russians want to swap oil for gold because they want to bring back gold as a monetary asset. They just want gold. And rather than swap their oil for dollars or rubles, they would rather have gold for it, and I think they are absolutely right to do that.

From that level, from 30,000 thousand feet as a central bank, you can make those decisions. And I can guarantee you the Russian central bankers, who are in charge of their gold policy, are not worrying about whether the price of gold is $1,300, $1,200, or $1,500. They don’t care about that. They just want to own the gold. And so they are going to keep doing these deals that enable them to acquire more physical metal.

At some point, when all the smoke is cleared in the paper markets, like it did during the London Gold Pool in the late 1960s, once that gets righted, then we will know what the right price is for gold.”