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“$50,000 Gold in 2020” — Jim Sinclair’s Senior Moment

Written by Gary North on March 20, 2014

Jim Sinclair now predicts that gold will be at $50,000 sometime in 2020. This is all over the Web.

With gold at about $1330 an ounce these days, the price would have to multiply by a factor of 38 to reach $50,000.

Let me the be the first to say that this is not going to happen. I say this as a gold bug out of the early 1960’s.

There are far better sources of both profits and income for investors than gold at $50,000 an ounce. Nobody is going to pay you or anyone else $50,000 for your Krugerrand.

If you can take four one-ounce gold coins, sell them for $200,000, pay your income taxes, and buy a debt-free investment house for $150,000 that will generate 10% per annum, why would you hold onto the coins? You would not hold onto the coins if you had 100 of them, or 300 of them. You would sell most of them. The population of the United States is going to go to 400 million people by 2050. These people will have to live somewhere. Why would you hold gold coins, when you could buy a debt free house just by selling four coins? Sit back and collect your rental income for the rest your life, and watch the value of your houses go up.

With housing, you get capital gains tax benefits. With gold bullion, you don’t. You will pay twice the tax rate.

He says that hyperinflation is going to hit the United States before 2021. Not mere inflation. Hyperinflation. Yes, you have heard that before. You heard it in January 1980, when gold was at $840 for one day. Will people be paying 38 times what today’s homes cost? Is the median price going to be $200,000 times 38? Do you really think the typical house will cost $7.6 million? If so, buy investment houses, not gold coins. You can buy homes with owner-financed debt. You can leverage your investment by at least ten to one. The renters will pay off the mortgages. Meanwhile, you can depreciate the homes. You can write off the mortgage interest payments as business expenses.

If hyperinflation is going to raise prices by 38 to one, get some leverage. Gold coins will not give you any leverage.

Mr. Sinclair needs to lie down, put a cool washcloth on his forehead, and take a nap. Senior moments happen to us as we get past age 70. We get over them. Usually.

Here is his position.

Renowned gold expert Jim Sinclair says financial calamity is just around the corner for America. Sinclair contends, “We are facing the annihilation of currency. We are facing the shift of America as the leading and most influential nation of the world to some form of banana republic. . . . If it wasn’t for food stamps, we would be facing long lines of people waiting for free food.” For gold, everything hinges on the U.S. dollar, and Sinclair says, “I think the dollar gets hammered. I believe we are headed for hyperinflation.” One of the many black swans, according to Sinclair, is the possible abandonment of the U.S. dollar by Saudi Arabia. If Saudi Arabia stopped selling oil only in U.S. dollars, what would that do to the buying power of the buck? Sinclair says gasoline would be “$10 a gallon very soon, without a doubt.”Sinclair predicts retirement funds and bank deposits are going to be taken by the government. How much of your money could you lose? Sinclair says, “In Cyprus, it was a total of 83%. . . . Cypress is the blueprint, and it’s what we are going to experience here in the United States.” Jim Sinclair, who has just accepted the position as Chairman of the Advisory Board for the establishment of the Singapore Gold Exchange, says, “The exchange will trade physical gold only and not future gold. . . . You have to make delivery.” Meaning, there will be no naked short selling or manipulation of this new market. Sinclair says, “This will emancipate gold from the paper price.” How high will gold go? Sinclair predicts, by 2016, “Gold will be $3,200 to $3,500 an ounce.” By 2020, Sinclair predicts, “Emancipated gold will be $50,000 per ounce.”

http://usawatchdog.com/jim-sinclair-50000-gold-us-dollar-collapse-hyperinflation-and-more/

In April 2008, he predicted gold at $1650. That was a good call. Gold hit $1650 twice: going up and going down.

HYPERINFLATION

First and foremost, contrary to Mr. Sinclair’s prediction, we are not facing annihilation of any major currency. There has not been an annihilation of any currency in any Western, industrial nation above the equator for two centuries, unless it has lost a major war. Germany’s hyperinflation in 1921-23 was the result of Germany’s loss in World War I. The same was true of Austria and Hungary. The reason why those forecasters who predict hyperinflation in the West appeal to this example is this: there are no other examples. They took place over 90 years ago. Nothing like this has taken place since.

If World War II did not produce hyperinflation in the United States, Great Britain, Canada, Australia, and New Zealand, why will today’s crony capitalist crises create it?

He is saying that something that has not happened since the French Revolution’s assignats in 1794 is going to happen before 2121. I have heard this forecast for 50 years.

(For the rest of my article, click the link.)

Continue Reading on www.garynorth.com

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28 thoughts on ““$50,000 Gold in 2020” — Jim Sinclair’s Senior Moment

  1. kenwd0elq says:

    If a person wanted to hoard precious metals, I suspect that lead, copper and brass would be more useful than gold in the long run.

  2. lilbear68 says:

    he forgot Zimbabwe currency that isn't in to good a shape lately. but I do agree to a point. Sinclair has been predicting this for a long time and like a broken clock its right twice a day. inflation will come as sure as night follows day but not to that degree

  3. Phillip the Bruce says:

    Full metal-jacketed lead may be the best bet.

  4. What Jim is basically predicting is the destruction of the dollar. The dollar will tank and be replaced long before that $50k is reached. By the time gold hits $5000, there will be a serious loss of confidence in the dollar. These numbers that are thrown out are just for effect. If the nominal price of gold were 50k an ounce, do you seriously think ANYONE would be willing to trade gold for FRNs? I tend to agree with Gary on this one, except he's making the assumption that $50,000 represents real value. Inflation is not the same thing as hyperinflation. Very, very severe inflation is not the same as hyperinflation. They are two totally different animals. Gary knows that. You can have extremely severe inflation and not have a loss of confidence in the currency. Hyperinflation occurs when it's obvious to everyone that the currency is a sham, and everyone's efforts are directed toward getting OUT of the currency and into anything that will hold value. When that occurs, price numbers are meaningless.

    BTW, I notice that the participation in this discussion is low. That doesn't surprise me. In a forum like The Daily Bell, it would be high. We're looking at two very different readerships here.

  5. kenwd0elq says:

    Yes, that's what the copper is for….

  6. Gary's lengthy article, and his uniformitarian views vis a vis society, government, and economy don't convince me. I'm a catastrophist. As far as I can tell, Jim Sinclair is not a Bible-believing Christian, but it's Gary's comments that remind me of a quote from 2 Peter: "Scoffers will come in the last days…saying, 'Where is the promise of His coming? For since the fathers fell asleep, all things continue as they were from the beginning of creation.' "

    We're on the cusp of a huge catastrophic upheaval. Jim Sinclair sees it. Gary North does not. What's wrong with this picture?

  7. He forgot Zimbabwe? Really?

    "There has not been an annihilation of any currency in any Western, industrial nation above the equator for two centuries, unless it has lost a major war."

    Zimbabwe is not a Western nation, it is not an industrial nation, and it is not even above the equator.

    So no, he didn't forget Zimbabwe.

  8. Gold, lead, copper and brass is called a well-balanced portfolio.

  9. Gary North fails to take into account that many of our allies, and enemies have been divesting out of the dollar as a reserve currency to buy oil on the international market. There is a reason Jim Sinclair predicts the crash of the dollar in 2016; this is the year everyone dumping the dollar since 2008 will, or should have completely divested out of the dollar as the "world reserve currency", and will have opted for the "basket of currencies" that will include some of our allies' currencies to be used for buying oil. Come that day, the dollar will predictably drop like a monolithic stone in the deepest part of the ocean. The dollar will probably lose 2/3 of its current value within days. And whomever holds the most US debt (read as China) will ultimately own the US. REALLY.

  10. Sinclair's predictions are definitely NOT off the table of possibilities. One of the reasons the feds are keeping the interest rate so low is because the US government owes so much money, and would have to pay an even higher premium for borrowing from China, and whomever else. Come 2016, gold may predictably rocket as the dollar moves as fast in the opposite direction. At that time, printing money will cost more than the value of that same money. At $50,000 by 2020, that would likely mean the dollar will have sunk to what, less than a dime? Don't bet against it, and don't under estimate just how high gold will escalate.

  11. New School says:

    If Putin dumps the dollar purposefully, won't that lead to a domino-effect and then dollars from around the world will come home to the US to roost? Then all these welfare food stamps ain't going to buy squat. The unbacked dollar is the ultimate source of all power that is statist and Democrat.

  12. New School says:

    Bring the dollar down, and bring Washington DC to its knees. Can someone comment on this?

  13. Mike Hoffman says:

    The excess reserves could play a part in high inflation in the next few years. Remember, there is over 2.4 trillion dollars in excess reserves back at the fed earning 25 basis points, whereas the fed funds rate is under that, meaning the banks have more of an incentive to keep the excess reserves where they are. However, if interest rates rise, which they ultamitely will, those reserves can be lent out into the economy and the fed will create more money to inflate the deflating bubbles, or maybe perhaps it wont even take higher rates. Maybe confidence will return(although through faulty reasoning) and the demand for money wil falll and therefore higher prices. many different scenarios can play out either independently of each other or can be intertwined. And yes, other countries are already finding ways to get around the dollar, but I dont know if that will play much of a part in a hyperinflation. A much more likely scenario would be for the dollar to lose its reserve currency status, and therefore much of its purchasing power, internationally and domestically. Very interesting times.

  14. Goldsaver says:

    Anything Jim Sinclair says is just his dementia kicking in. Him and King world news are out to sell silver and gold. I’ve been a stacker for 3 years now and nothing he said or King World news has said has ever come true… Gold and silver will go up but no where near that price….

  15. cj_martin says:

    Well if it isn't Gary North of the "world is going to end January 1, 2000" fame… yes his powers of prediction certainly are impressive aren't they? Can we admit Mr. Gary that your ability to predict future events, prices, trends, etc. is about on par with a cartoon ground hog? If hyperinflation happens the U.S. is likely to become extremely unstable politically with violence widespread. This is the environment you want to purchase rental property in? You need to put on your night cap and go say some hail mary's for all the b.s. nonsense you spouted for years up until 2000. Your predictions are junk and I get better results from the daily horoscope in the local news rag.

  16. After getting his Y2T ‘senior moment’ completely wrong while unequivocally stating that Sinclair is crazy seems more like a projection of the pot calling the kettle black. Those who try to gain from the denigration of others, in the long run, end up only sullying themselves. The modus operandi is now all too apparent.

  17. Kauf Buch says:

    Clearly this author has no knowledge of the site: FOFOA.blogspot.com.
    It might do him well to peruse it before making such haughty remarks.

  18. Amen to that

  19. Fiat goes to zero says:

    North says…."I have heard this forecast for 50 years." – yeah well no one ever heard a forecast of computer date Armageddon (Y2K) before about 1995 or so, but that didnt stop North from sounding the alarm.
    all fiat goes to zero….eventually.

    The US will be nuked by russia, and the US dollar will implode, 50K per oz gold sounds too conservative, id say at least 80k, or 100k per ounce. Rome will fall, the elites have planned it, dont have to be a rocket scientist to know the US dollar is doomed, and gold valued in that currency will be perhaps priceless. what fool will sell his gold for US fiat?

  20. True, Zimbabwe is not western, but then who is to say because it has not happened in two hundred years it won't ever happen? Today is not like yesterday and a lot of things that had never happened are now happening. In fact every week brings new threshholds of debt and deficit. The bottom line is no economy with a fiat currency has every avoided total monetary collapse, so although it has not happened in a while is small comfort because we are looking for something to happen that has never happen before. A fiat currency to not collapse. What we have to ask our selves is how "western" is the U.S. economy.

  21. I agree, and like one person wrote, you don't hold gold and silver so that at some point you can trade it for dollars. You are holding it as a store of value for when the currency is worthless. So what you say is exactly right. It is not how many dollars you will get for your gold but how much food, transportation, housing, etc. I think the dollar will be gone at some point and then there will be other currencies or commodities that will take its place. Once the dollar is worthless gold will be infinitiy in dollars but by that time we won't be pricing it in dollars anyway.

  22. Until they start pricing goods in gold and silver then just hold tight and hold, and buy, buy, buy while the price is low. The value of these metals will be in direct correlation to how much individuals are holding. I could easily see a car going for an ounce or less of gold. We will be facing a whole new paradigm. We did witness the government confiscating gold in this country and we are currently witnessing attemps to do the same for weapons and ammo, even food supplies. These are not the actions of a government overseeing a stable political and economic situation. Bank holidays will happen here and Cyprus is a developed country wether or not we like to admit it. What happened to those people there happened because they had their money in banks, not buried in a hole in the ground.

  23. Uncle Shaggy says:

    With gold at about $1330 an ounce these days, the price would have to multiply by a factor of 38 to reach $50,000. Let me the be the first to say that this is not going to happen.

    $35 x 38 = Exactly $1,330. Can't happen? It just did. Timeframe was different, that's all. Amazing the irony a calculator can produce these days.

  24. You paint a very dire, but realistic possible scenario. The US is in no real position to start sanctioning Russia. If Russia retaliates (as they've begun to do), we could predictably take a huge hit to our economy via the sinking of the dollar.

  25. more gold says:

    35×38=1330 hahahaha, great retort uncle shaggy. timeline will be the only difference, amen amen.

  26. josephpmartino says:

    I don't know what the price of gold will be in ten years. However, when I was a child back in the 1940s I collected stamps. One of my prizes was a German postage stamp issued under the Weimar Republic. It was for several billion marks (I can't recall just how many, and I no longer have it). Just think: someone's life savings weren't enough to buy a postage stamp once the inflation hit. If the Fed keeps creating money out of thin air, the same thing could happen here. We don't have to lose a war to destroy ourselves. Keynesian economics and "quantitative easing" will do the job all by themselves.

  27. Thank you for any other informative blog. Where else may I get that type of information written in such an ideal manner?
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  28. sinclair encouraged people to buy at 1900 saying “the angels” would pull it to 3500 by 2015 and, in any case it would never go below 1700. Regarding 50,000, he also said in such a case the government would implement a windfall tax on gold profits so don’t count on selling your coins at a profit to pay off loans, etc. Now he is pitching gold mines in africa and encouraging people to put their gold into warehouses in singapore, despite having previously said to always take physical possession.

    There was a time I thought this guy was a guru. The photos of him living with 20 dogs and pet pigs in his house should have been a giveaway I misjudged him.