Brodsky – US Money Base Will Explode to $15 – $17 Trillion
March 7, 2012
With tremendous volatility in gold and silver, today KWN wanted to speak with the firm that is calling for $10,000 gold to get their take on what readers should be focused on at this point. Paul Brodsky, who co-founded QB Asset Management Company, had this to say about his firm’s strategy and where he sees things headed:
Paul Brodsky continues:
“It’s interesting we tend to have these takedowns every so often. When that happens, those of us who truly want to be long-term holders of precious metals see that as a buying opportunity. So when we see paper derivatives taking down the spot prices of gold and silver, we take a look at where we can buy physical (gold & silver) and where we can buy miners, which is, of course, physical in the ground….
“But the physical stock of gold hasn’t changed. All that’s changing is the fundamental cheapness of the metals vis a vis the paper they are priced in. If you go back and look at the Bretton Woods model of valuing money, they would take monetary base and divide it by official gold holdings. They came up with a price of $35 which they tried to maintain.
If you were to do that today, you would find that price would be around $10,000. That’s obviously because since 2008 the Fed has increased base money about 215% to $2.7 trillion. I think more than anything that quantifies the magnitude of potential change in the gold price.