In a recent interview on the Commodity Culture YouTube channel, renowned economist and author James Rickards made a bold prediction about the future of gold: a potential surge to $23,000 per ounce.
"It will get there," Rickards confidently stated, outlining his reasoning behind this audacious forecast. He emphasized the increasing fragility of the global financial system, citing factors such as excessive debt, geopolitical tensions, and the potential for a recession.
A Gold Standard Revival?
Rickards' analysis is rooted in the concept of a potential return to a gold standard. He argues that a significant devaluation of the US dollar could trigger a flight to safety, driving investors towards gold as a tangible asset.
"If you had to resort to gold to restore confidence, you can't just pick a number," Rickards explained. "The math is fairly simple. Take M1, take 40% of M1, that's the dollar amount of gold you need to have a strong gold standard, divided by the number of ounces in 8,133 metric tons, and you get a number. And that number today is around $23,000."
A Warning for Investors
While Rickards' prediction is undoubtedly eye-catching, he also cautioned investors about the potential risks of a market crash triggered by AI-driven trading algorithms. He warned that these algorithms could exacerbate market volatility and lead to significant losses.
"You're combining human nature, which is prone to panic, with automation, which acts as an accelerant, an amplifier," Rickards said. "And you put the two of them together, and you get something that more closely resembles a flash crash."
Rickards' insights have sparked significant debate among investors and analysts. While some are skeptical of his bold predictions, others view his analysis as a timely warning about the potential risks facing the global economy.
Watch the full interview:
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