More gold hogwash and no truth …

There’s an analyst out there — in fact, a few — who somehow believe gold is headed to at least $10,000 soon, if not $50,000.

They claim that the U.S., Europe and Japan are getting ready to monetize their gargantuan debts by raising the price of gold to whatever price it takes to back the world’s debt.

Let me be perfectly clear: Backing the globe’s debts with gold is never going to happen and if it somehow were to, it would be the most foolish thing that could be done.

Suppose, for instance, the price is officially pegged at $50,000 an ounce. Who wouldn’t sell their gold at that price? Crashing the (new) system.

Further, what good would it do to have the globe’s debts backed by an artificial, fixed price for gold?

Price fixing anything does nothing but make matters worse. It creates stagflation and depression. Followed by chaos and inflation once the price fix is busted by the free markets, which it always is.

Price fixing money with a gold standard, a silver standard, or bronze back in the bronze ages or even today in Africa with cows and seashells ….

Does not fix a monetary system … does not prevent booms and busts … and it certainly does not prevent leaders and politicians from making the same mistakes — over and over and over again, throughout the history of the world.

The big governments of the world want gold out of the monetary system, once and for all.

Look, I love gold just as much as any gold bug out there. But the big governments of the world could care less about gold. They want it out of the monetary system, once and for all, just like they got rid of silver back in 1965.

They want to get rid of cash too. And want instead a digital monetary system, for a variety of reasons.

They don’t want gold. Yes, Russia is rumored to be buying and so is China and a few other countries.

But is that proof they want a gold standard? Hardly.

It’s merely justification to diversify reserves and perhaps invest in gold for the longer term. China has never had a gold standard in its 5,000-year history and actually invented paper money during the Tang Dynasty in 740 B.C.

Why would Beijing want a gold standard now — a set of golden handcuffs that would merely drag its economy down into the swamp, eliminating any flexibility whatsoever?

Don’t get me wrong. I love gold just as much as you do. So, while the governments of the world are stomping on it …

We all should be buying, but not until I’m certain it’s bottomed.

And when will that come? Soon, probably in the first quarter of 2017.

Oh, and by the way: There’s an analyst out there who claims that since Germany is pulling its gold back from the U.S. Federal Reserve’s underground storage in New York — way ahead of time — that Germany must be getting ready to buy more.

That’s hogwash. Actually, it’s the opposite. Germany is getting ready to start selling its gold.

Germany is starting to go into debt and an economic slide. If it can’t stay liquid — bye, bye Germany, the European Union … and the euro.

In other words, Berlin is pulling its gold home to sell it, locally. Washington doesn’t want it sold in the U.S.

All of this is handwriting on the wall. Handwriting, you can see if you study history and cycles, as I do.

That’s what the Edelson Wave is all about. There is really nothing new under the sun, and the more things change, the more they remain the same.

Just the actors change, like in a great Shakespearean play.

Best wishes and a Happy New Year …

Larry

Larry Edelson, one of the world’s foremost experts on gold and precious metals, is the editor of Real Wealth Report and Supercycle Trader. Larry has called the ups and downs in the gold market time and again. As a result, he is often called upon by the media for his investing views. Larry has been featured on Bloomberg, Reuters and CNBC as well as The New York Times and New York Sun.

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Comments 68

barth bracken December 28, 2016

Harry Dent Jr. says gold will go to $700 by mid2017. I hope not. Barth Bracken

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peter reiss December 28, 2016

Is the Gold in the Fed's NY Underground storage? There is a reasonable chance that it isn't(having been sold to keep the price under control). Not something you would entertain, but the US is controlled by a Gang whose goal is a One World dictatorship. Still, your record of calling correctly Gold's moves gives you credibility.

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Randy D. December 28, 2016

Time will tell who is correct on this.

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Ron Price December 28, 2016

Hi Larry: I emailed you a couple of times re BTG but have not heard back. You recommended this stock back in September and since then you have not commented further on the stock. Please let me know what is up with this stock and whether I should continue to hold it. Thanks Ron Price

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Bob Porter December 28, 2016

Am reading elsewhere that China is in for some much higher debt. Wouldn't that encourage China to sell some of its vast holdings of gold, bringing the price down? Bob Porter P.S. Am an 84 year old ex-stock broker, and I immensely admire Real Wealth and your blogs. Thank you, Larry.

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Jim Patten December 28, 2016

I'd sell my gold (and silver) in a heartbeat, if it hit 50K! But...it won't. I shorted JDST, DUST, and 3x inverse gold from 1,340 and sold at 1,132. I'm out right now. It's having a hard time busting above 1,140. If it does head lower in the next few days or so, do you believe it's headed further down from here? At least for the next couple months?

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john willis December 28, 2016

When you discount governments making certain moves because it would be incredibly stupid, I am not completely convinced that they will not do it. A look at ours, Japan's and others would seem to be a primer in stupid decisions. Gold standards do not look likely for all the reasons you have often cited. Neither are sound reasoning coming from paid Keynesian liars hired by the FED, treasury and the media. So in your heart of hearts do you believe the EURO will essentially bite the dust? How long after that is it our turn in the barrel?

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Clint December 28, 2016

What would happen if Governments (Government controlled banks) confiscated / purchased all gold from all citizens at $1500 / ounce and then globally re-priced it through the banking cartel at $50,000 /ounce? Could this happen?

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Howard December 28, 2016

Larry, You are on a hot streak. The last 3-4 articles have been outstanding.

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Dr. Rob Lee December 28, 2016

Most the digital currencies I've studied want a floating gold price, they will index it to daily value on a free market. The Chinese have bypassed Europe with the Shanghai Gold exchange. Setting the futures price at 1 oz of gold to 1 piece of paper. This goes around the current 250 pieces of paper to 1 oz of gold - if that's what the ratio really is. It could be 1000:1 - who knows? With a 1:1 ratio and no fixed price per digital coin - it stabilizes the currency.

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Michel December 28, 2016

And I know an analyste who predicted 3000-5000 for gold backed by his AI system...

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PeaknikMicki December 28, 2016

A few thoughts came to mind; 1) Why the hostility against a gold standard. US most prosperous period was under a classical gold standard. And if wanting flexibility, then the POG can be allowed to move in a band. I would prefer a free gold scenario myself where gold is the universal store of value rather than backing the currency, but having that said, based on historical precedent gold standard has worked better than fiat. 2) Yes, China invented paper money, and it did end in hyper inflation. Other periods China didn't have a gold standard but a silver standard. From a price stability point of view it doesn't really matter what it is as long as currency can't be printed in unlimited amounts. Gold however suits the role best as hoarding it doesn't affect industry, like hoarding silver would. 3) What evidence is there that Germany is selling their gold? Selling their gold at current prices to save the economy wouldn't make any sense at all. Only in case of Germany being forced to sell does it add up and that would be because the counter parties want it. Reminds me of the quote "We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The US Fed was very active in getting the gold price down. So was the U.K." – Eddie George, then Governor of the Bank of England, 1999

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john gormley December 28, 2016

Germany could sell it w/o having it in posession.

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Edward Roos December 28, 2016

Larry, Just received Jim Rickard's pitch to buy "The New Case For Gold" which is the #1 survival technique for the coming dollar collapse. I viewed your e-mail just now which make a lot of sense! Therefore, I threw away the other junk. Thanks again.

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Bernd Burkhardt December 28, 2016

Dear Larry! I have been reading your forums for the longest time, i love gold /silver precious metal and i do not believe in those so called Expert's that gold will rise $10,000.00 plus. However i feel that it could go as high as $1,800.00 - 2,200.00 per oz, i may be wrong but i still think in the long run it would be a lot saver investment the all the "Fiat/Greenbacks" which are floating around in our world economy. All true History - gold has always kept a certain value, Wars where fought over it. Bottom line i sure wished all those so called Experts would make up there mind and come up with something solid, and stop blowing up hot air. You have a very *** HAPPY NEW YEAR ***.

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Andrew Kraiss December 28, 2016

Although this doesn't necessarily hurt (or help) your argument, the Tang Dynasty was AD 618-907 not BC. Before that they did use metals and other commodities as currency and at first the paper money was actually letters of credit.

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Chris Brant January 22, 2017

Good catch Andrew. And of course due to the Bretton Woods Agreement in the late 1940s, since the Dollar was pegged to gold up by a rate of about $35/troy ounce until 1971, all countries in the world were on the gold standard by default. The reason is that the US Dollar was the world's reserve currency and the Dollar was pegged to gold while all other world currencies were pegged to the Dollar. So if any country in the world, including China, wanted to obtain US Dollars to beef up their Dollar reserves, then they would exchange their respective currency based on the pegged exchange rate for Dollars, a derivative of gold at the time. Plus, the oil was only traded in US Dollars and all countries that needed oil had to use US Dollars to make that acquisition for oil. Also, countries who wanted to exchange their paper US Dollar reserves for gold were allowed to do so until Richard Nixon suspended the US Dollars for Gold Exchange Program and closed the "Gold Window" for good in 1971. Of course, Nixon blamed speculators for the problems in the gold market, but that's another story. The Gold Standard changed when we went to a floating rate currency system and adopted the US Dollar standard as the US struggled to maintain adequate gold reserves to back our currency and speculators put pressure on the gold market. But the growing debt primarily from the "Great Society" and excess currency printing also complicated matters and led to a run on gold by countries like France and others who deemed it necessary to keep their gold in lieu of US Dollars. Gold serves as insurance and the US Government tried to convince the world that the US Dollar was as good as gold. But we all know that was not the case and the Gold Standard was officially eliminated.

steph December 28, 2016

larry, I've followed you and your stock recos for years(and years) made a bunch of cash with your suggestions and finally in 1999 bought the metal ... my concern now is ... this business about $5k/oz, now is that deflated/devalued dollars buying that?? I'm kinda of the opinion gold is the 'zero line'. dollar up ... gold value down. dollar down ... golds value goes up. as someone who has the 'wave' mentality i think you of all people could get that one! NOW, buying at the absolute bottom ... really?? you don't think everyone in the universe is going to do the same thing?? and after talking to my gold guys, basically they will go first come first serve(unless the mondo buyers hit em then its 'bigger(purchases) are better). I'm hitting it now ... and ill save some for 'better profits' when it bottoms, but I'm not relying on availability given, if only your crowd, hits the markets with 'truck loads of cash'. so ... now what?

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Kenny December 28, 2016

Larry, thank you for your timely and thought provoking analysis, you have helped me tremendously on making a decision in a direction to take, either a back up plan or sit back and wait for the opportunity. Best wishes to you and yours.

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Penny Magee December 28, 2016

Hi Larry, Based on the AI model, what future global events do you see that will trigger the price of gold? Thanks, Penny

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ron goddard December 28, 2016

i can only agree larry. it seems that like all bright ideas it becomes super luminous and blinds us to the obvious. its bad enough that nut case bankers and politicians have wreaked havoc in the market place..( have we been there before?), now they want to digitise everything including our bank accounts, whereby financial haircuts are the order of the day. and what can we do about it? bugger all thats what!!! humanity is intent on survival of the fittest and so it becomes a circus. only a very few of us, about 0.0001%, have the exceptional ability to make the rules..the rest of us just become cannon fodder lol. but we do have happy days, i think. please keep up the good work.

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Stu December 28, 2016

Hey Larry -- who says there would have to be "an artificial, fixed price for gold"? I would rather have the market determine what the price of gold would be, and this price would flucuate.

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Johann Reiter December 28, 2016

Larry, I enjoy your insights especially your eight steps to save our economy/country. My question on the golday standard is how did.the USA become the most affluent country on the planet under the gold standard and with the Treasury dept printing money as needed for growth of the country instead of creating it with debt attached? Why wouldn't a gold standard be than money backed by debt?

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Dan Robbins December 28, 2016

I would sure sell you my gold at $50,000 an ounce. Heck, I would even throw in a few thousand ounces of silver for free if you bought all my gold at that price!!! Lol

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F151 December 28, 2016

Governments typically sell gold when a rally is imminent. Sooo....I consider it good news that Germany is ready to sell.

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Gary Stuber December 28, 2016

Where do you think gold is headed in 2017? I own some good mining stocks, I believe, so I would love to hear your take on gold?

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murphy December 28, 2016

what is your thinking on the effect bitcoin/cryptocurriency (s) will have on the demand or sell side for gold.

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Roger Mitchell December 28, 2016

Larry In my IB account I'm holding: 400 shares of GDX at 26.50 cost. 850 shares of SLV at 16.78 cost. 460 shares of VGPMX at 12.10 cost. Needless to say I'm down about 6,200 With those positions. I have about 87,000 invested and even with those funds down, I still up for the year because I have made other solid plays. I have 20 ounces of gold physical. I have 2,000 ounces of silver physical. Question I have is this. Should I hold my positions in the 3 funds and ride it out?

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Robert Sherwood December 28, 2016

I would rather have excess money in silver, platinum and gold than in a .50% bank account subject to change inflation, confiscatation and tax. Precious metals move up in 10 to 20 year market. Gold was $18 to $20./oz from 1790 until 1933. $35./oz from 1933 until 1971. $850./oz in 1980 down to $256.oz in 2000. Gold spiked from 2001 until 2011 up to $1750 and for a day to $1900./oz.. Today spot gold is about $1140./oz trading between $1050. And $1350./oz. I see in the next five years gold holding $1000. to $2000./oz barring war or any Black Swans. The U.S.dollar has surprised everyone this past year due to the over sold price of oil from $90. per barrel down to below $30. for a short time. This is at the expense of the worlds fiat currencies. The U.S. stock market and U.S. banks at this time are the envy of the world.

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paul ellenbogen December 28, 2016

Harry Schultz who charged 5k an hour in 1980 for an hour consult predicted 5k. So these absurdly high predictions attract people but not much else. Where gold/silver will be is any bodies guess. Inflation should revive if Trump's spending plan is implemented. It does amaze me with all the problems in the world that gold and silver r not a lot higher

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PeaknikMicki December 29, 2016

Just my intuitive thoughts; What is absurdly high always depends on circumstances. 1980 for instance CME allowed only sell orders of Silver and Paul Volker raised the interest rates to 20%. Had this not been done the outcome could have been very different. It is noteworthy though that 1980 POG by itself went to match DJ index, allow US treasury to back M1 (or was it M2?) and balanced the federal debt. Just to achieve any of this, gold would have to again go to "absurdly" hight levels. Or another way to put it is that if Gold at such price is "absurdly" high then DJ, M1/2 and Federal debt already is at absurdly high levels as it would take absurdly high POG to balance.

Jason December 28, 2016

What's your thoughts on Bitcoin Larry? Or anybody on here have an opinion?

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Dan S December 28, 2016

Yes Larry, gold most likely will not hit 10K or 50K per ounce however; to think the stock market is not way overvalued is very foolish if not ignorant. The entire system is to create a retirement system protected by the Central Banks under G.W. Bush. This is most likely the biggest Ponzi Scheme of all times sanctioned by our loving government. A way of getting US taxpayers to forget about their funds placed in the Social Security system only to have it stolen right before their eyes. For our great leaders to come out and say that Social Security was not meant as a retirement fund is a joke. Let these jackasses give up their tax payer funded pensions it's only fair. Oh that's right it's tied to the stock market, go figure. Its all smoke and mirrors and it will collapse as all Ponzi Schemes do.

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turbojet December 28, 2016

Query ... An article I read that was dated March, 2016 stated that the "Comex Gold Cover Ratio (Open Interest/Registered Gold) or gold bars available for delivery was at a ratio of 542 : 1. If the price of gold was pegged to a high dollar amount of 10k or 50k an ounce and as stated in the above article ... " Who wouldn’t sell their gold at that price?" ... is he talking about those who already have their gold in physical form trying to sell it, or is he talking about the system crashing when 542 paper owners of a bar of gold all ask for delivery of that 1 available bar.

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Ken December 28, 2016

Sounds right to me. Governments will not return to gold. The return will occur after all of the current governments have collapsed, and we are in a mIddle age has begun in earnest. This must happen not only because of the gargantuan debt level. but also the level of corruption within and outside of government. You may disagree with my intensive study of history, but there are so many precedents, because our species continues to make the same mistakes over and over again.

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Expat Tom December 29, 2016

I have more faith in your analysis that 90% of the others. I have made a lot of money, almost 300% on UUP ans EUO call options. Thanks, Tom

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John Su lee December 29, 2016

If gold is 10,000 than a new car goes for $350,000 yes

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Sohail December 29, 2016

Greed and fear are the strongest emotions and many Human Beings capitalise on these emotions.People also tend to believe what they want to believe.There are many many analysts who are consistently wrong but people still buy their newsletters.

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Dennis Nations December 29, 2016

Good article. Only an imbecile would hold onto gold that had gone from roughly $1,300 all the way to $50,000! I have been contacted by several investment firms crowing about how gold will skyrocket to at least 5K an ounce and possibly to as high as $50K an ounce including the hot shot former CIA analyst. It is a shameless plug to subscribe to his newsletter for only $4,999. Armed with the information I got from your article I will pass your "hogwash" comment to him and save my hard earned money. Thanks

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Walt Moore December 29, 2016

Larry, your comments about gold tell me you've been thinking about it, and maybe even done some serious investigation. My comment is that the millions of tonnes (not ounces!) of gold stored in Southeast Asia are not hogwash. My information, albeit second-hand, is that ownership is being seriously contested. To me, this has been confirmed by both President Obama's "Pivit to Asia" and China's claim to the South China Sea, with encouragements for Chinese fishermen to move into Indonesian waters. Assessment of this potential flash-point for WWIII is beyond my pay scale, but I'm curious what you might be able to add.

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Kevin Beck December 29, 2016

I don't understand...why WOULD any government want a gold standard? It makes flexibility impossible. The idea behind Roosevelt confiscating American gold was to take it out of the monetary system, so that the Federal Reserve was enabled to create more debt than what gold would have allowed him to do, to fight the Great Depression. Gold in circulation was a limit on the amount of debt the government could issue to fund its activities. The same principle when Nixon closed the gold window. Gold that the United States was exchanging at a fixed rate of $35/oz was preventing the increases in government spending that were required by the combination of guns and butter.

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Richard E Browning December 29, 2016

I don't always agree with you but your article regarding gold certainly hits the mark. I can see gold going to perhaps $2,000 or in a stretch maybe $5,000 in years to come, but gold will not be used to wipe out debt.

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Jim Leatzow December 29, 2016

I enjoy your work & admire your straight shooting manner.

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Giulio December 29, 2016

Gold, gold, gold. I was told at a very tender age that "all that glitters in not necessarily made gold". My questions to Larry and all are these, how do we make sure that the glittery coins that we purchase are made of REAL GOLD?, could they not be made of tungsten with a thin coating of gold. It is impractically and expensive to have all purchased coins assayed for purity. Could not many of the coins sold be "fools gold"? If anyone knows of a foolproof way to purchase real gold, please let me know.

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M December 29, 2016

Larry, I think your article contains much wisdom about future prospects for gold. I also noted the allusions to Ecclesiastes 1:9 (nothing new under the sun) and Daniel 5 (handwriting on the wall).

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James M Lowe December 29, 2016

Love your commentary. Also, I like how it can be read in a reasonable amount of time so my mind does not go wandering off the pages.

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Mike December 29, 2016

I bought this stuff not so much to make money on it but to protect what I have accumulated over my working life. As more money is printed, my holdings in gold/silver as a store of value should stay even. What happens if governments decide to go the other way? That is, issue "new" currency with an exchange rate of 10-1 or 20-1 or even more? That's one way to reduce the multi-trillions of debt but what happens then to the metals? There would have to be someway to make this "new" money valuable wouldn't there? Otherwise its no better than the old. I don't see anyway out of the world debt crisis except to back with something of finite value. Nothing in 5000 years has been invented that will replace gold as a standard measure of value. Everything else is just crap.

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Joe Liprie December 30, 2016

Would it be a tax advantage to Sell losing gold stocks at the end of the year then buy it back 31 days later.

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Tim Gibbons December 30, 2016

I totally agree about the three stooges going bye bye. I've been thinking the same about Germany, Europe and the euro, as in a couple reverse etfs. You should invent a lucrative basket of shorts on the three stooges ( Germany would be Moe ) throw in Japan the yen and China for a turbocharge to nice returns. Like XLF for the financials, just thinking. The K wave looks interesting, regards, Tim

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Herbert Baum January 1, 2017

Makes sense. But, we live in interesting times..and there is very little that would surprise me. Thanks for your intelligent comments. Herb Baum, Jupiter.FL

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Wynn January 1, 2017

While gold will probably not be a "Standard" for monetary value. If it becomes a standard or part of a standard and reaches $50,000 an ounce, it would probably be illegal to sell ( or hold ) and probably be confiscated by governments there by upholding it's value and NOT crashing the system.

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C gro January 3, 2017

Diarrhea of the mouth. Get to the point!!! Just because he's intrigued with cycles don't bore us to death. Time is money.

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Marty Drees January 4, 2017

HI Larry, I was watching your K wave video and it reset after about 20 to 30 minutes! But since you (and everyone else) have illuminated the crawling bug at the bottom of the video picture, I would have to watch the whole thing from the start in order to see whatever the end happens to be! Sorry, I have watched your explanation sometime in the past so I will just guess that it ends pretty much the same. Put the crawling bug back! Marty

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ben vanderburg January 4, 2017

Our economies around the world are all driven by debt, not productivity or wealth. A large portion G.D.P. is driven by government spending, which loses velocity and wealth and is only supported be the printing press. The moment people lose confidence in the U.S. dollar, the value will decline to pennies and possibly not even exchangeable into into gold at any price. I was in Nigeria in the early 90's when their money devalued from a British pound to pennies U.S.. This type of devaluation has occurred many times through history. The convenient method used to reset the debts. Do you notice how strong you are now compared to 20 years ago? You do not need help to cary $20.00 groceries

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Dr. Rob Lee January 6, 2017

""Further, what good would it do to have the globe’s debts backed by an artificial, fixed price for gold?"" It won't be fixed, rather floating.. I'd rather have gold than Carbon Credits as a backing for the digital currency.

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John January 6, 2017

Amen Brother!!! Same circus, different clowns...

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Gloria Stutts January 13, 2017

Thank you very much for the update. I appreciate it very much, have a Bless night

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John Kemp January 13, 2017

Larry: I have been a subscriber to your various publications for a number of years. Are you satisfied that your recent charts on gold are meaningful to your readers? I asked a simple question via the usual Weiss channels and I still do not have a reply other than the standard acknowledgement. Why do you not show $ amounts within your charts? To me, the charts you produce can and should be far more useful than they are now. I can assure that your reputation would sky rocket if your readers received meaningful data. For the record, I am committed to your work (particularly on gold;silver and the miners) - I implore you to upgrade your charts. Respectfully submitted John

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Thomas Clawson January 13, 2017

If my memory serves me right, Germany asked to have their Gold sent back from the Federal Reserve several years ago. They were told it would be sent back in increments over seven years. So, Larry, do you think they wanted to start liquidating their gold back then?

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Ed Peace January 13, 2017

In your gift No.2 Gold chart, it seems to show gold increasing from 12/31/2016 to 7/2017. Yet in your article, you state you think the price will bottom sometime in the first quarter 2017. I think I read somewhere that you felt it would be sometime in March 2017. Can you clear this up? Thank you in advance, I appreciate reading your insights.

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ben vanderburg January 14, 2017

Who wouldn't buy gold at whatever denominational value? If the printed notes have no value, what does $50.000.00 mean to you in value. Unless you are living under a rock: you would know paper currencies are now being weighed in Venezela instead of counted. How many pound of U.S. dollars do you want to pay for a hot dug?

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