Jim Rickards was recently interviewed by Eric King, of King World News and Jim had some very interesting things to say about gold and the Price Of Gold. So interesting that I figured a blog post about it would be good for our clients to read. I encourage you to read exactly what he said at http://tinyurl.com/6l5omfe

Jim believes that the Fed is out of ammunition and therefore the IMF will need to step in during another major global economic crisis and use the SDR to bailout out governments. The SDR is a fully convertible currency that the IMF can print out of thin air. Its value is determined by a basket of other fiat currencies. Make no mistake; the SDR is just another fiat currency, the printing of which will devalue all currencies. This move would make the SDR the new world’s reserve currency which could potentially destroy the dollar through hyperinflation.

Jim says that if the SDR supplants the dollar that there will be a massive rush into gold as people wake up to the fact that we are just shifting from one paper money to another. This is why you are seeing gold price estimates in the $7,000 range. It is purely a math equation. Jim believes that we could see this occur within “the next couple of years.”

Jim also comments on the gold bubble talk. He says that “right now we are nowhere near bubble territory.” Fear by the average investor at all-time high prices for gold is understandable, but Jim believes that at $1,800 per ounce that we are nowhere near a peak. He states maybe around the $10,000 per ounce level he could see a bubble forming and that if you are going to buy gold then you need to be able to with stand the volatility. Which includes all the talk of bubbles, which has been going on since gold broke $850 per ounce years ago?

Rickards is a brilliant man and he says that if he sees gold go down $100 he buys more.  He sees all big dips as a great buying opportunity. We tend to agree with him, after all the trend is bullish.

A very interesting point that he makes is that even if institutions shifted 5% of their assets into gold that “the price would go to the moon.” Even if only .5% of the trillions of investable dollars were to shift into gold, prices would skyrocket as there is not enough gold on the planet to satiate that level of demand.

There is still time to buy gold according to Jim Rickards, so use the recent dip as an opportunity to strengthen your portfolio. Today it is at $1,788/oz, off of its recent high of just over $1,900/oz for the price of gold.