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Doug Casey on gold and the dollar

Doug Casey has been in or associated with the gold market as long as I have, which will be 34 years next month. He is presently associated with several investment newsletters. His books have made The New York Times best-selling list.

With Casey, you never have to wonder where he stands. He as confident, sometimes arrogant, as anyone you will ever hear speak. published a recent “advertorial” with Casey about his views on gold, the dollar, and the credit crisis.

Casey has a really pessimistic outlook for the dollar, which means, of course, he has a bright outlook for the precious metals. Below I’ve posted some of Casey’s statements. I recommend the whole article be read.

The U.S. dollar will eventually reach its intrinsic value; it’s simply a question of time.

The dollar is a hot potato. There are trillions – nobody knows exactly how many – floating outside the U.S.

At some point there’s going to be a panic out of the dollar.

I’ll be surprised if the U.S. is able to maintain its present geographic boundaries for this century.

We’re now experiencing a lot of monetary inflation, which eventually will be reflected in price inflation. What’s really going to tip this over the edge, however, is the rest of the world deciding to get out of dollars.

I’m sure the government, directly and indirectly, did everything it could to keep the price (of gold) down. The last thing they want to see is a gold panic.

I think we could see gold going over $1,000 within the next 12 months, and maybe even before year-end.

A few comments on the gold market (mine, not Casey’s):

The August 16 huge price drops in gold and silver brought big, really big buying to gold and silver. Krugerrands, the best-known gold coins in the world, are now in short supply. Premiums on Rands are now about $8 to $10 higher than they were before the drop. All secondary market Gold Eagles, which were selling about $4 below new Gold Eagles from the US Mint, were bought up, and now Gold Eagle buyers have to pay the full premium for new 2007-dated coins. Past price drops always brought in buying, but this one wiped out the inventories of precious metals dealers and wholesalers alike.

Buyers wanting cheap gold should consider Austrian 100 Coronas or Mexican 50 Pesos, which are selling about $7/oz less than Krugerrands.

We saw the same increase in premiums for silver bullion products, some of which are now in short supply. Junk 90% silver coins still have the smallest premiums of the silver bullion products.

More people are starting to see the handwriting on the wall. As Casey said, “It’s just a matter of time.”

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