Fred,
Thx for sharing your thoughts.
Though I think it is possible for POG to reach $5000, I don't think that will create too much catastrophic impact on real economy. Gold is just a tool to store extra wealth after daily expenses. No matter it is $1000/once or $5000/once, as long as it can store values better than fiat money and the soaring POG is proving that, people will buy it if they have extra wealth to store. The price of oil, food, car will not increase at the same pace as gold, cause gold is not just a commodity.
China and Russia can forfeit(kind of) gold in their countries now, but that is no surprise cause everyone savvy in international history knows who are really running those countries - the best organized and PR'ed mafia families. I am not too worried about the possibility of US gov doing so in near future, cause they can not afford it - doing that will end US dollar as the universal trading and reserve currency and introduce huge inflation and depreciation of dollar right away. Without a free exchange/trade between dollar and gold, who will take dollar for exchange of real oil, gas, copper, goods when all smart know a bunch of private bankers in NY can play the boss of US gov and print as much green paper as they need ? Also 2010 is different from 1930 Roosevelt time with US relying on 60% imported oil, maybe 99% $1000 or less priced imported goods. Drink 3 bottles of vodka and do it, Mr. Roosevelt's follower !
All US debts and SS/Health liabilities will come to a solution with double digit inflation and currency depreciation, and policy changes, which is not a Huge deal. The majority of middle class without heavy gold position just have to accept the broken dream of a golden retirement. Lower classes will get help with 3 meals and a bed, no more and no less. I don't see any solution other than this cause it is simple, with current unlimited globalization, US middle/low end workers can not compete with China/India/Mexico workers with 90% less salaries and benefits. What can American do, unless they can vote both Democrats and Republicans out which has a hair thin possibility in near future. Thus, gold will benefit the most from this super social and economical transition.
JMT and GLTA
