Jim Rickards on Gold: Declining Prices Versus Skyrocketing Demand

bloomberg: Money: the coming collapse of the international monetary system" will be out in april. 

I love that your covers have money doing funny things. 

It took a long time to teach those dollars how to shoot. 

All kidding aside, you just heard from a colleague, su keenan, tracking a lot of these various moving parts in the market. 

You were, like many, mistaken among right? 

With gold, however not about the dollar or oil. 

What do you see coming? 

Gold investors are happy 2013 is over. 

What is interesting is that we all know the price action down about 30% for the year, but the physical demand is through the roof. 

I recently came back from switzerland after i met with refiners and gold stewards and they said they are working triple shifts to produce gold. 


 

They have for the first time ever -- i talked to a guy who has been in the business since 1978 and for the first time ever, they are having a difficult time keeping up. 

This is all going to china. 

The price is going down for some technical reasons, probably manipulation as well. 

But the physical demand is through the roof. 

The floating supply is disappearing. 

It is going straight to china. 

It is being put underground and will never see the light of day for 300 years. 

You have a paper short, a balance and a very small amount of physical gold. 

In the current single -- the currency wars, one of the things is people are losing confidence in paper money. 

And there is the physical demand -- you mentioned jewelry. 

But there is a concern that paper money will not be worth anything.

 

Right, but that is the history of all paper money. 

China is redefining the global gold market. 

They have turned their back on the lvmh. 

The old standard bar is dead. 

The new standard is the k bar. 

And it is pure than the former standard. 

-- more pure than the former standard. 

All that means smuggling and bringing it in through military channels. 

It is a fascinating play and it is set up for a huge goal rally. 

At some point, you will want your gold and there will not be any around. 

Looking at the historical charts for gold, obviously you are a winner if you bought thirty years ago. 

Right -- 30 years ago.

 

Right, a very big winner. 

The price action is down. 

Technically, it is very bullish for gold. 

Every time the gld has gone down, people set up. 

The banks get the shares and trade in the secondary market. 

When the banks want the gold and cannot find anywhere else, they cash in their shares and go to the gld warehouse, and they are selling it to china. 

The disappearance of gold is a very bullish sign. 

It means it is scarce and banks cannot get it elsewhere. 

How much could it go up? 

Maybe not necessarily within the 12 months because the markets do not follow the lunar year, but how much could it go up? 

My intermediate price target has not changed. 

If anything, it has gone up.

 

I have it at $7,000 per ounce, possibly $9,000 or higher. 

But not right away. 

It could go like this and then straight up. 

It will take a little while. 

I am looking for the inverse of the dollar. 

Gold correlates inversely to the dollar. 

The dollar goes to zero because of a loss of confidence, gold will be infinite. 

The Fed will have to return to Gold Standard.

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