The graph below is nice in several ways - it is very long term, it shows the correlation between gold and the debt, and gives reason for confidence that gold's trend will continue. (And the debt's too, unfortunately)
However, the graph is also misleading. Gold and the debt are NOT moving in tandem. Gold is advancing much faster - as it should, given the vastly smaller amount of gold being used to hedge against the huge number of dollars.
While the debt has increased about 3.5 times in 17 years, gold actually fell for the first five of those years. It has subsequently increased 6 times in 12 years. Moreover, its price is accelerating at a much higher rate than the debt's.
Gold to hit $2,000 before year end
Gold at $2,000? I didn’t used to think so – but now I am not so sure. In fact, I’m almost convinced it will happen before the year is out.
By Garry White
Telegraph.co.uk
10:24AM BST 03 Aug 2011
Last week’s events on Capitol Hill in the US were very damaging. After we abandoned the gold standard, the dollar is now the globe's reserve currency - and US politicians decided to play a game of chicken with the debt ceiling. Their behaviour verged on the shameful.
The fact that an 11th hour deal was done and the ceiling was raised is a relief, but the process shattered trust and confidence in US politicians.
There is also an uncanny correlation between the gold price and the US debt ceiling. Over the past 30 years, the gold price has tracked the ceiling whenever it has been raised.
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Gold at $2,000 by the end of the year is not a certainty – but everything is now in place to make it happen.
Full story: http://www.telegraph.co.uk/finance/personalfinance/investing/gold/8678682/Gold-to-hit-2000-before-year-end.html
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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