Citigroup metals analysts ask why gold is not already at $2,000/oz

$2000 an ounce for gold will turn out to be a conservative prediction (in a few years) when the dust settles from the massive government intervention into the economy this week. You cannot nationalize 1/2 of the US housing market and bailout or subsidize one bank and investment firm after another without massive repercussions in the economy weeks, months and years into the future.

"We have been surprised that gold has been so heretofore quiet, and have expected a much strong and more immediate response to the government takeover of GSE [Government Sponsored Enterprises] mortgage insurance entities, and broker-deal bankruptcies," they wrote. "It is notable that hard-core goldbugs have been proven correct in the decade-long contention that an overwhelmingly vast and complex pool of nested financial derivatives would ultimately result in cascading defaults and ruin for major portions of the banking system. Frankly, we're surprised that gold is not already at $2,000 per ounce." More...

Comments

[Cashlin]

Good post.