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Paul Brodsky continues:
“It’s interesting we tend to have these takedowns every so often. When that happens, those of us who truly want to be long-term holders of precious metals see that as a buying opportunity. So when we see paper derivatives taking down the spot prices of gold and silver, we take a look at where we can buy physical (gold & silver) and where we can buy miners, which is, of course, physical in the ground....
Continue reading the Paul Brodsky interview below...
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“But the physical stock of gold hasn’t changed. All that’s changing is the fundamental cheapness of the metals vis a vis the paper they are priced in. If you go back and look at the Bretton Woods model of valuing money, they would take monetary base and divide it by official gold holdings. They came up with a price of $35 which they tried to maintain.
If you were to do that today, you would find that price would be around $10,000. That’s obviously because since 2008 the Fed has increased base money about 215% to $2.7 trillion. I think more than anything that quantifies the magnitude of potential change in the gold price.
When people look at a large number (for gold), it’s easy for people to say, ‘Oh, that’s crazy.’ By definition, the fewer number of people that are involved the trade, the bigger the change will be. So we don’t concern ourselves with the current pricing.
We think it’s much more telling when we look beneath what goes into the pricing. We could make a case that gold could go higher than that ($10,000). We think base money in the US is going to rise from about $2.7 trillion to $15 trillion to $17 trillion. All we know is before it’s through, the price (of gold) is going to be significantly higher than where it is today.”
Brodsky is one of the true original thinkers in the gold space and this interview illustrates his confidence in the research his firm has done regarding where the price of gold is headed. The KWN audio interview with Paul Brodsky is available now and you can listen to it by CLICKING HERE.
© 2012 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
Eric King
Brodsky - US Money Base Will Explode to $15 - $17 Trillion
With tremendous volatility in gold and silver, today KWN wanted to speak with the firm that is calling for $10,000 gold to get their take on what readers should be focused on at this point. Paul Brodsky, who co-founded QB Asset Management Company, had this to say about his firm’s strategy and where he sees things headed: “The macroeconomics behind gold have never been more attractive. When we look at bank assets versus base money, across the world, it makes sense that they (precious metals) are fundamentally cheap.”
© 2012 by King World News®. All Rights Reserved. This material may not be published, broadcast,
rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
March 7, 2012
