If hyperinflation ahead gold to $10,000 - if deflation, $2,000 - Taylor

Jay Taylor is a well-respected pulisher of the miningstocks.com website. Taylor believes that we are in a gold bull market of a lifetime. Taylor says that many experts believe the debt crisis will end in hyperinflation and will cause gold to ultimately rise to $10,000 an ounce.

Author: Lawrence Williams
Posted: Monday , 06 Aug 2012

Jay Taylor, well-respected publisher of the miningstocks.com website and associated newsletter, makes some excellent points on the likely performance of what he calls the real price of gold (as opposed to the nominal price) and on gold stocks - on both of which he is extremely bullish. In part his premise relates to gold's history as a store of wealth which helps those who invest in it maintain their wealth in times of inflation or deflation, not necessarily to increase it hugely, except perhaps relative to those who put their faith in other investment options or just hold their wealth in cash.

What Taylor points out is that it is the maintenance of, or appreciation in, gold's purchasing power when all about it is descending into the abyss which is most important - particularly in these times of global financial turmoil from which the exit may yet be many years ahead - which is the key, rather than the ultimate price of gold itself.

He notes that some observers see the outcome of the sovereign debt situation which is assailing most major global economies as an ensuing hyperinflation - which, if it happens, in his view may see gold surging to say $10,000 an ounce. However there is also a contrary view which thinks there is more likely to be a period of deflation ahead under which, Taylor reckons, gold may ultimately rise to only say $2,000. But in either scenario Taylor points out that to the investor in gold the net result is much the same in terms of the yellow metal's purchasing power relative to prices in general. So whether gold rises to huge new heights, or increases modestly is actually irrelevant - it's what happens to prices in general, and gold's relationship to them, which is the key.

Taylor discussed this in a recent interview on Canada's Business News Network at which he was, interestingly, told not to refer in his comments on the gold market to GATA - the Gold Antitrust Action Committee, whatever he believed, which is a disturbing position for an independent business network to take. Whatever one thinks of GATA and its long crusade against what it sees as a gold-control establishment, supported by governments, which has led to the suppression of the gold price keeping it below its natural level, it does publish some interesting and compelling research on the matter. To try and control references to the organisation in this way perhaps only enhances the viewpoint that perhaps GATA does indeed have a point.

In a letter to GATA informing them of the BNN gagging, Taylor comments "The producer responded by asking me to please avoid talking about GATA. It was OK for me to say what I believed, he said, but not to say the name "GATA," because, in his words, "That causes a lot of trouble around here." I can see this only as a form of media control by the establishment."

In reiterating his views on gold to the organisation, Taylor commented: "Despite all the anti-gold propaganda, there is no reason to doubt that we are in the bull market of a lifetime for both gold and mining shares. Very soon we are going to see a dramatic increase in both the real and nominal price of gold, and the gold shares are going to break out as well. Hence my unflinching support of the yellow metal and gold mining shares as well as silver and silver mining shares."

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