This morning, CNBC reported that Dominic Schneider, head of nontraditional asset classes at UBS Wealth Management is predicting gold to drop to $1050.00 in 2014. UBS is a global firm providing financial services in over 50 countries.
Schneider believes that rates hikes are on the cards and typically will make owning gold more expensive because it is not an income producing asset.
Gold dropped 28% in 2013 despite the Fed pumping 85 and now 75 billion into the markets. This was gold’s biggest loss in 32 years.
Do we see gold dropping below $1200.00? Not for any real length of time. We continue to remind clients that it reportedly costs 75% of the world’s gold mines $1,200.00 to produce one ounce of gold. The last thing the Fed wants to do is cause these mines to stop gold production.
The Fed understands the herd mentality better than most and they don’t want investors to perceive a shortage in anything, especially gold. Using Wall Street to hone their skills in transferring wealth and shaping investor and speculator mindsets is something they do very well.
We continually hear stats about how the economy is growing, unemployment is down and other ludicrous reports that are not even close to reality. The Fed and Washington claim there is no inflation yet it is always a direct result of money printing. It is unavoidable.
The fact that most Americans believe a healthy Wall Street equals a healthy economy is a difficult mindset to overcome. While this is highly inaccurate, many think believing a lie is better than hearing the truth.
Simply put, our economic system is unsustainable and if left unaltered we will suffer great financial loss.
Half of American households receive some sort of payment through government sources. That means the rest of us are working in their behalf. Our system is designed to transfer wealth and it does this without most persons ever knowing what happened. Many still believe inflation is a good thing. How can losing purchasing power ever be a good thing?
In the land of make believe where wealth is created out of thin air, we guess anything is possible.
Gold will never lose its prominence over fiat currencies when it comes to being insurance. The greatest gold bug in history is history itself.
Gold Goliath is not your typical gold dealer.