In just four months, the price of gold has suffered an incredible 19% fall in price from its August high of $1,900/ounce to December’s low of $1,529. Those who own gold were shocked. Potential gold buyers were dismayed. Overwhelming confidence in the gold market was supplanted by fear.
People—including me—are wondering how low can gold go?
But while gold’s 19% fall has caused me some amazement, it has not inspired my fear. In fact, I’m mostly amused.
Why? Because, when I look at some facts concerning gold that I regard as “fundamentals,” logic compels me to conclude that the current fall in the price of gold is only temporary; that in the next two to twelve months, the price of gold must rebound and surpass previous highs.
Here are some of my “fundamentals”:
1) The national debt is too great to ever be repaid in full. I believe John Williams’ (shadowstats.com) calculation that the real national debt at $75 trillion (rather than $15 trillion reported by the gov-co) is correct. If so, the debt can’t possibly be repaid and must be repudiated by either 1) hyper-inflating the currency; or 2) abandoning the fiat dollar. In either case, the price of gold should rise dramatically.