Jim Rickards: The Coming Gold Super-Spike
By Jim Rickards – The Daily Reckoning
I consider gold a form of money. That means I investigate price movements in gold the same way I investigate moves in any other global currency — and find the best way for you to play it.
Right now, if you understand physical gold flows, you could stand to make a fortune in the months and years ahead.
Last June, I visited Zurich and was able to meet with some of the most knowledgeable experts and insiders in the physical gold industry. In March, I visited Lugano where I met with the top executive of the world’s largest gold refinery. As a result of these visits to Switzerland, and other points of contact, I have been able to gather extensive information on the major buyers and sellers of gold bullion in the world and the exact flows of physical gold.
This information about gold flows is critical to understanding what will happen next to the price of gold. The reason is that the price of gold is largely determined in “paper gold” markets, such as Comex gold futures and gold ETFs. These paper gold contracts represent 100 times (or more) the amount of physical gold available to settle those contracts.
As long as paper gold contracts are rolled over or settled for paper money, then the system works fine. But, as soon as paper gold contract holders demand physical gold in settlement, they will be shocked to discover there’s not nearly enough physical gold to go around.
Continued at: The Coming Gold Super-Spike – The Daily Reckoning
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