Is The Price Of Gold Really Headed To $20,000?

Wednesday, August 12, 2015
By Paul Martin
August 12, 2015

With everyone focused on the devaluation of the Chinese yuan and the subsequent chaos in global markets, today King World News thought it was a good idea to take a step back and look at the big picture of the war between gold and the Federal Reserve. This led to a remarkable question: Is the price of gold headed to $20,000?

MacroTrends: “This chart (below) shows the ratio of the gold price to the St. Louis Adjusted Monetary Base back to 1918. The monetary base roughly matches the size of the Federal Reserve balance sheet, which indicates the level of new money creation required to prevent debt deflation. Previous gold bull markets ended when this ratio crossed over the 4.8 level.”

King World News note: The chart below reveals just how far the bull market in gold has to run before it ends in exhaustion. Gold would have to advance 17.8-times in price vs the monetary base in order to hit the 4.8 level highlighted above. If the monetary base just stayed stagnant and the 4.8 ratio is hit, that means the gold price will be at $20,000.

The Rest…HERE

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