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Kiener: Gold Prices To Double On Paper Market Default
Posted By admin On October 7, 2008 @ 8:24 am In Featured Stories,Old Infowars Posts Style,Uncategorized | Comments Disabled
Paul Joseph Watson
Tuesday, October 7, 2008
Jurg Kiener, CEO of Swiss Asia Capital, told CNBC this morning that the flight from paper currencies as a result of global interest rate cuts will lead to a doubling in the price of gold within a short period, as demand for physical precious metals outstrips supply, causing paper contracts on gold to default.
|Kiener pointed out that the expected global reduction in interest rates, kick-started last night by the Australian central bank’s one point cut, means gold is a far more attractive option than any currency because purchasing power of paper money will continue to decline.|
“The physical market has been on fire – it’s getting very hard to buy one ounce coins and smaller bars, most jewelry shops have been running out so we have a supply problem,” said Kiener.
Kiener said that there was a two tier market in gold, the one on Wall Street where the bankers continue to gamble, and the physical market which is “red hot” and demand is outstripping supply.
“I think we’re going to get very close where we see the environment where the paper contracts on precious metal defaulting, and with that we’re going to get a massive price increase in the overall prices of precious metal,” said Kiener.
Asked where he expected gold to go after the paper market broke down, Kiener said he expected gold to double in price, “in a very short period of time, it will spike up quite fast,” he added.
“If you had an oil rally going from $65 to $140 dollars in nine months, I think it can double in gold in a much shorter period because the market is much much smaller,” Kiener stated.
Kiener pointed out that the expected global reduction in interest rates, kick-started last night by the Australian central bank’s one point cut, means gold is a far more attractive option than any currency because purchasing power of paper money will continue to decline.
As we highlighted yesterday, the demand for physical gold is frantic and people are willing to pay premiums of $50 or more to get their hands on the precious metal.
The potential for hyperinflation is a very real threat, and it has led to a spike in gold purchases. The Royal Canadian Mint recently sold out of one ounce gold bullion bars in what tellers described as a “crazy” demand to own the precious metal.
The U.S. Mint also ran out of one-ounce American Eagle coins in August and one-ounce American Buffalo coins at the end of September.
Michael Levy, a gold broker based in Surrey, B.C., said the volume of people purchasing gold is at its highest since the inflation scare of 1979. “People were buying then because of inflation, now because of a growing distrust in paper currency,” he said. “It’s a different mentality but the same rush.”
Yesterday, 40-year market veteran and fund manager Robin Griffiths of Cazenove Capital Management told CNBC that the overprinting of dollars as a result of the Wall Street bailout will act as a catalyst for gold prices to rocket to $2,000 an ounce, as demand for precious metals outstrips supply amidst rumors of market manipulation.
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