Price of Gold

Price of Gold should normally be easy to forecast , having regard to the level of indebtedness of most countries, which often exceeds their GDP.
This abysmal debt isarithmetically impossible to be reimbursed, except for a few countries like Switzerland or some oil producers .
The debt isn¨t repaid by the GDP but by the Budget .
Being chronically in budget deficit these countries must rely on borrowing to serve their debt and prevent default . As a result the debt continues
to rise, and will continue, provided that the markets still accept to finance it .
This clearly looks like a worldwide Madoff type ponzi scheme .
In this apocalyptic scenario, Gold appears as the only asset which will not default because being the debt of nobody .
In the central banks balance sheet, Gold is the only asset with cash to have a real value . Gold cannot be printed, its supply is increased
of 2.500 to 3.500 T of new gold mined each year .
Central banks are increasing their purchase of Gold to rebalance their balance sheet overloaded with US TBonds . They bought 900 T of gold
last year .
The new US President , who seems to replace the FED, is looking for lower interest rates . We think that in this current environment, the share of Gold in the individual portfolios or savings is bound to increase .

Claude Guerre