Why gold is going to $5,000.
Gold is going up for several reasons that are undeniable, and the only thing that can prevent this increase in value is an orchestrated global government manipulation (i.e. taxation or confiscation).
What are these reasons:
1) Peak oil. Oh, this is another controversial topic, with many believing we have plenty of oil. But trust me the decline rate is now bigger than than what future projects can deliver. Look for oil prices to reach $200 by the end of 2015. And gold will follow oil prices higher. Note: This is the number one reason I am bullish on gold.
2) An increase in the money supply. Today gold should be valued higher based on the increase in the money supply the past decade. As the money supply continues to increase, gold will be pushed higher.
3) Lack of economic growth. We are reaching the end of growth for our current economic system. As global growth stagnates and then declines, the financial system will implode causing a default in bonds and a run to gold.
4) The default on US Treasuries. Oh! This one could never happen, you say. Well, I'm telling you not only is it going to happen, but that it is inevitable. We are adding debt at the rate of $100 billion per month. All we are doing is digging a deeper hole. The bubble is building and it will pop.
5) The default on European and Japanese Bonds. This one will probably come first, but it will be the other four that really drive gold higher.
6) Lack of physical gold. This is coming. Last month the Chinese imported 100 tons of gold. At that rate, we will be out of physical gold inventory in a few years. They are leading the way, but soon others will join the train to get physical gold.
7) Fear and sensibility. Once some of the above begin to occur, people will realize that this time it is different, and that the US economy is not coming back. That realization is a few years away. It will be the smart money that buys gold below $2000. But fear and sensibility will drive it to $5,000.
8 ) The utter collapse of the US and global economy. This comes last and will be the final spike in the gold price that takes everyone's breath away. If you think this cannot happen, get ready for one hell of ride. It's already underway and it's just getting started.