Nick Barisheff comments on QE3 & confirms his $10,000 gold price outlook

“Gold’s sharp price increase in response to QE3 announcement, compared to a smaller increase in equity prices, indicates the futility of more fiat currency expansion”.

That’s Nick Barisheff his view about Thursday’s announcement from the US Fed. Nick Barisheff is the CEO of Bullion Management Group Inc and author of the book $10,000 Gold; Why Gold’s Inevitable Rise is the Investor’s Safe Haven which will be released later this year. The statement of the Fed and the effect it had on the prices of precious metals, confirms Nick’s expectations of  gold priced at $10,000 an ounce.

The Fed is desperately trying to stimulate job growth in the US. Their belief is that monetary easing could serve that objective. The point however is that all large economic regions worldwide are involved in the same kind of monetary easing practices. So the end result in reality is that central planners are destroying the value of currencies. What that means for everyone of us? The answer is simple says Nick Barisheff: massive wealth destruction. The solution to protect yourself against all of this? The answer is even more obvious: buy and hold gold!

In the following quote, we bring the official statement which we received yesterday directly from Nick Barisheff. He explains the irony of the Fed’s actions: on the one hand Mr Ben Bernanke is very concerned  about the stagnation of the labour market (indeed a reason for concern as we see the lowest labor force participation rate in 30 years). But on the other hand, the bad employment figures are simply the result of excessive monetary stimulus by the Fed.

“That’s what Bernanke got from QE1 and QE2,” says Barisheff. “The fact is the Fed can pump all the money it wants, but there is a massive debt deleveraging going on, and both US consumers and US businesses will continue to save versus spend the easy money he’s pumping into the system. Non-financial U.S. companies currently hold $930 billion in bank accounts, 50% more than before the recession, and the U.S. household savings rate has jumped from zero to 4%.”

After QE1 in was announced in March 2009, the gold price was relatively muted throughout the period, there was an assumption that bad debt would be forgiven and/or accounting arrangements made to hide the insolvent state of large financial institutions and sovereign nations.

QE2, announced in August 2010, gold rose and the rise in equities was less than after QE1. The evidence is clear that more money did not solve the problems.

“The idea that systematically degrading the value of hard-earned corporate and personal savings through unlimited money printing is going to produce an economic miracle is not supported by the results of Q1 and Q2, not only in the U.S. but also in Europe,” says Barisheff. “The only things that are going up is central bank purchases of gold in countries like China and Russia, they are tired of holding depreciating US dollars and Euros. Other hard assets including silver, platinum, farmland and agricultural products untainted by the mirage of financialization are also rising.”

“Gold told us something yesterday,” says Barisheff. “The message is that the era of high returns financial assets for both stocks and bonds, as Pimco’s Bill Gross has stated, is over, and gold is the primary go-to asset for wealth preservation. QE3 will only serve to accelerate this trend.”

We strongly recommend to pre-order Nick Barisheff’s book on$10,000 Gold; Why Gold’s Inevitable Rise is the Investor’s Safe Haven.

Interested in the bullion products from BMG Bullion? Then have a look at the BullionBars or Funds that BMG offers. They are intended primarily to preserve your wealth.

Most recent news from the company includes the appointment of three new members to the Board of Directors, anticipating the strong growth potential of the precious metals sector.


Receive these articles per e-mail

Subscribe for the free weekly newsletter and receive 3 papers about physical precious metals investing