Hyperinflation &  $6000 Gold Price  

In KWN today, the Hyperinflation &  $6000 Gold Price  , the Gold Price  reaching $6000 came up during the  Ben Davies’ interview. He was saying that the phenomena of the hyperinflation can hit you like a solid wall. Taken from Davies’ storytelling of a woman from Bolivia’s personal experience, she said that one day, her bank account had been drained to half of its amount. People with higher than the average wages may not notice the inflation rates, but lower income workers will feel it in their daily expenditures like buying food etc.
The gold market’s inclination today is up. Davies has this to say about gold;

“I think the mini-boom that we had in the nominal gold price, up to $1,900, we’ve been working off that mini-excess sideways.  The disinflationary pressures from this concept of credit dying is worrying, and I think it weighs on all assets prices.  But gold is doing what it should be doing.”

Ben Davies adds:
“If you look at it on a relative basis, gold has maintained its purchasing power.  It’s done exactly what it should be doing.  Short-term I am concerned that we could be going down to $1,400.  Yes, that’s a real risk in this environment.

The Greek situation that’s sort of bubbling away, there’s no change in the status quo.  In some ways, as awful as it sounds, it would have been lovely to have had an extreme event happen so that we get to the end of this process….

“Maybe it would have needed a Berlin airlift as they (Greece) were exiting out of the euro, to come and actually dump food on Greece to help people out, who would have been starving as they exited out of the eurozone and the currency.  But at least we would have been nearer to the bottom.

Unfortunately, the way it’s going we’re just constantly protracting out this problem.  So while that’s happening and the solutions are completely wrong, the risk is this constant weight of deleveraging, and that is weighing on all assets.

But people are ultimately exiting out of these fixed income assets, this sovereign debt, and they are going to be going into gold.  I can see that the Asian demand is still very palpable.  In fact it’s increased from last year quite dramatically.  That is the buyer in the market.  The question is, will they (China) be there over the summer months?”

Gold and silver is a solid asset management instrument to capitalize in this point in time. Davies presented that

“ If you were to run M4, M3 numbers, etc, and assert a value to gold on an appropriate metric relative to that, obviously gold would be at stupendous prices.  I believe that gold has considerable room to go to the upside, four or five times (Gold price above $6,000).  I think that’s not an inappropriate suggestion.”

 Hyperinflation &  $6000 Gold Price 

 is accurate in the world’s economic standing today. In Australia, the current lifestyle is more expensive compared to a few years ago. The footprint of inflation is worldwide. Prices hiking up uncontrollably, the value of money not sufficient to support the standard of living. We can counteract its effect by devoting our assets to gold and silver. Buy gold and silver now.

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