Originally Posted by hpracing007
Okay... In very simple term, if your gold all of a sudden had a price of 55k oz, would you not exchange some if your gold for something else? If not you, wouldn't the other who own gold?
What do you think would happen when the supply of gold for sale skyrockets?
When gold somehow rockets up to that number, I would not be able to afford as much of it, and there are many other assets I could purchase which are relatively cheaper. There would be much less demand for gold. What do you think would happen then?
Actually, that is a very good question! And your reasoning is right on. This is all about getting gold to flow.
What most people don't realize is that the flow of gold is getting reduced to zero. I am not talking about a little bullion here and there, I am talking about the real wealth accumulation of bullion by nations, oil producers, and the giants of wealth in the world. At current prices it is getting frozen and the only way to get gold flowing again is to raise its price in real terms, not just notional terms. That is why it must rise while everything else stays the same in price.
Gold must flow. That concept is not taught in the West so it is foreign to economic theory here. But soon gold flow will come to a standstill and the only way to release it is to jack up the price. And with all the money printing of the last twenty years, $55,000 is about the right price for gold to get moving again.
Read the article for a much much better explanation.