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Mike on the Keiser Report

At 13:42 minutes, Max Keiser talks to Mike Maloney about how high gold would go to account for the money printing. Also about Ben BernankeQuantitative Easing, thePonzi scheme monetary system, and—of particular interest to our numbers-oriented readers—the 1970s bull market, including his formulas for calculating a theoretical peak price for gold.

Mike talks about using the gold held by foreign central banks to determine the price gold would need to rise to in order to restore confidence in the dollar, should the global currency system collapse—something close to $20,000 per ounce. But if one were to simply replace all the fiat currency now in circulation with gold, the price of gold would have to rise to something like $203,000 per ounce

Now, as Mike says, we’re not saying gold prices will rise to those levels. But the exercise does illustrate that gold continues to be extremely undervalued, even as the gold bull market continues its climb. In the end, fiat currency is nothing more than claim checks written against gold, as free market ultimately will revalue gold as the ultimate arbiter of value.