Rickards: Global Reset Of Gold To $10,000 Can Go Either Way: Bretton Woods Style Or PURE CHAOS
SilverDoctors.com
May 6, 2018
Jim says the reset of gold to $10,000 per ounce is coming, and it could play out in one of two ways. Here’s the details…
by Jim Rickards via Daily Reckoning
Following the Panic of 1907, John Pierpont Morgan was called to testify before Congress in 1912 on the subject of Wall Street manipulations and what was then called the “money trust” or banking monopoly of J. P. Morgan & Co.
In the course of his testimony, Morgan made one of the most profound and lasting remarks in the history of finance. In reply to questions from the congressional committee staff attorney, Samuel Untermyer, the following dialogue ensued as recorded in the Congressional Record:
Untermyer:I want to ask you a few questions bearing on the subject that you have touched upon this morning, as to the control of money. The control of credit involves a control of money, does it not?
Morgan:A control of credit? No.
Untermyer:But the basis of banking is credit, is it not?
Morgan’s observation that “Money is gold, and nothing else,” was right in two respects. The first and most obvious is that gold is a form of money. The second and more subtle point, revealed in the phrase, “and nothing else,” was that other instruments purporting to be money were really forms of credit unless they were redeemable into physical gold.
My readers know that I am a big proponent of gold. We should all be mindful of Morgan’s admonition, and not lose sight of the way in which real wealth is preserved through manias, panics and crashes.
Today I’ll provide an overview on why I recommend gold in every portfolio, and why gold may be the best performing asset class in the years ahead.
Specifically, my intermediate term forecast is that gold will reach $10,000 per ounce in the course of the current bull market that began in December 2015. I recommend that investors keep 10% of their investable assets in physical gold (with room left in the portfolio for “paper gold” in the form of ETFs and mining stocks).
Here’s the analysis:
We begin with the 10% allocation. The first step is to determine “investable assets.” This is not the same as net worth. You should exclude your home equity, business equity and any other illiquid or intangible assets that constitute your livelihood. Do not take portfolio market risk with your livelihood or the roof over your head. Once you’ve removed those assets, whatever is left are your “investable assets.” You should allocate 10% of that amount to physical gold.
The Rest…HERE
