Jim Rickards: Gold Price Could Double Overnight In U.S. Dollar Crisis
Gold Silver Worlds: Before proceeding, please be advised that the statement in the title is not a forecast nor an expectation. The potential for the gold price to double overnight is real and existing, which is not the same as sure.
In a major US dollar devaluation crisis, which would occur if the US would fail to raise the debt ceiling on Thursday October 17th, there should be a significant impact on the gold price. Jim Rickards wrote about this in his book ‘Currency Wars: The Making of the Next Global Crisis’ in which he “envisages a series of ‘black swan’ events that trigger a loss of confidence in the US dollar precipitating a rush to get out of the greenback.”
In such a scenario, the market would question the Fed’s staying power, which is the most fundamental aspect of the current monetary system. A dollar collapse would ensue and gold could double in price overnight.
The following comes from Arabianmoney:
The US President is then left with no alternative but to take charge under the 1977 International Emergency Economic Powers Act. He nationalizes all gold held on US soil and suspends bond trading to halt the dollar’s fall. A bipartisan commission is appointed with 30 days to sort out what to do next.
Basically the US dollar has to be reissued and reset to a new value based on a much higher price of gold. If this all sounds far-fetched then it is. But so was the subprime mortgage crisis before it actually struck and yet it happened.
The unsinkable can sink, and so could the US dollar, just as HSBC was the biggest loser in the subprime crisis (although the bank did not sink because its compartments held and it managed to right itself without a government bailout).