Citigroup says gold could rise above $2,000 next year as world unravels

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jeanius2's picture
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Citigroup says gold could rise above $2,000 next year as world unravels
sorry if this has already been posted .. but thought you guys would like it:

Citigroup says gold could rise above $2,000 next year as world unravels

is poised for a dramatic surge and could blast through $2,000 an ounce
by the end of next year as central banks flood the world's monetary
system with liquidity, according to an internal client note from the US
bank Citigroup.

woman with gold bar - Citigroup says gold could rise above $2,000 next year as world unravels
An employee of Tanaka Kikinzoku Jewelry K.K. displays a gold bar at the company's store in Tokyo
Photo: Reuters

The bank said the damage caused by the financial excesses of the
last quarter century was forcing the world's authorities to take steps
that had never been tried before.

This gamble was likely to end
in one of two extreme ways: with either a resurgence of inflation; or a
downward spiral into depression, civil disorder, and possibly wars.
Both outcomes will cause a rush for gold.

"They are throwing the kitchen sink at this," said Tom Fitzpatrick, the bank's chief technical strategist.

world is not going back to normal after the magnitude of what they have
done. When the dust settles this will either work, and the money they
have pushed into the system will feed though into an inflation shock.

it will not work because too much damage has already been done, and we
will see continued financial deterioration, causing further economic
deterioration, with the risk of a feedback loop. We don't think this is
the more likely outcome, but as each week and month passes, there is a
growing danger of vicious circle as confidence erodes," he said.

will lead to political instability. We are already seeing countries on
the periphery of Europe under severe stress. Some leaders are now at
record levels of unpopularity. There is a risk of domestic unrest,
starting with strikes because people are feeling disenfranchised."

happens if there is a meltdown in a country like Pakistan, which is a
nuclear power. People react when they have their backs to the wall.
We're already seeing doubts emerge about the sovereign debts of
developed AAA-rated countries, which is not something you can ignore,"
he said.

Gold traders are playing close attention to reports from
Beijing that the China is thinking of boosting its gold reserves from
600 tonnes to nearer 4,000 tonnes to diversify away from paper
currencies. "If true, this is a very material change," he said.

Fitzpatrick said Britain had made a mistake selling off half its gold
at the bottom of the market between 1999 to 2002. "People have started
to question the value of government debt," he said.

said the blast-off was likely to occur within two years, and possibly
as soon as 2009. Gold was trading yesterday at $812 an ounce. It is
well off its all-time peak of $1,030 in February but has held up much
better than other commodities over the last few months – reverting to
is historical role as a safe-haven store of value and a de facto

Gold has tripled in value over the last seven years, vastly outperforming Wall Street and European bourses.

Futuo's picture
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Re: Citigroup says gold could rise above $2,000 next year ...

Is it still possible to get gold, physically? I know when Bloomberg mentions the price, it's always "Gold at X amount of time delivery is at USD$ Y". Is it so simple that you can just place a phone call and have gold delivered to your door? I'm in the Chicago area, and this summer I couldn't find any. Haven't look for a few months...any suggestions?

Damnthematrix's picture
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Re: Citigroup says gold could rise above $2,000 next year ...

U.S. Dollar Currency Collapse Within 30 Days

Oct 24, 2008 - 10:41 AM

By: Eric_deCarbonnel

It appears that there is a common refrain going around the investment community. It goes something like this:

"Gold should be doing better, and, since it isn't, I am not going to buy it"

Investors who believe this are making the mistake of thinking COMEX gold is the same as real physical gold. It is not.

COMEX gold is a form of debt. It
involves one party promising to produce gold (money) to another at a
future date. Like all forms of debt, a COMEX futures contract is only
as good as the counterparty behind the contract. Right now, because of
low margin requirements, sellers of gold futures only have enough gold
to cover 10% of outstanding contracts stored in COMEX warehouses.
Considering that the biggest sellers of gold futures contract are
insolvent financial institutions, it is obvious that COMEX gold has enormous counterparty risks .
If even a quarter of outstanding contracts asked for physical delivery,
it would be enough to guarantee a default. Since a financial collapse
would actually creates the risk total default (insolvent banks can't
produce the gold or cash), COMEX gold fails miserably as a safe haven . This is why COMEX gold prices are falling, while physical gold is disappearing from the market place

of scarcity, physical gold is selling at an enormous premium to gold
spot price (which is set by COMEX). How big a premium? Well, on eBay
2008 gold buffalo are trading between 300 to 400 over spot price. That
is a 50% premium. The enormous premiums being paid in the physical
market means that a large number of December gold contract holders are
likely to request delivery. A volume, whether it causes defaults or
not, is likely to change the marketplace perception of gold and cause a
rush of into a physical gold plagued by shortages. Gold will skyrocket
over 2000 in a matter of days.

I am not the only person who believes COMEX gold futures are on the verge of collapse.

Headless's picture
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Re: Citigroup says gold could rise above $2,000 next year ...

Did Citibank hire some laid-off Goldman Sachs employees? Citi must be long on gold...

Won't Citi be disapointed--after attempting to corner the physical gold market--when Goldman comes out and claims that those holes in the ground where oil wasn't (which inspired them to conveniently call for "Oil to $200 by December") turned out to be filled with gold...

Is anybody paying attention? It seems we need a bigger roll of duct tape...

Futuo's picture
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Posts: 155
Re: Citigroup says gold could rise above $2,000 next year ...

Scary stuff...especially having watched the BNN interview that your article links to. I found i can get American Buffalo gold coins on ebay at $845, which seems extremely reasonable considering "24hr gold" is at $816.30. Any thoughts?

krogoth's picture
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COMEX will collapse

Because it's vapor. You want gold? Buy it and hold it in your hands. How? I don't know, China seems to be sucking up quite a bit of it right now, but I would sooner eat melamine than trust a Chinese gold dealer to sell me some.

caroline_culbert's picture
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Re: Citigroup says gold could rise above $2,000 next year ...

1. I speculate since our de$t far exceeds the amound of physical gold we hold:

2. U.S. Gov't wants to bolster the gold rush to increase the value of gold

3. Increase the value of gold and maybe the U.S. Gov't can finally pay off their debt with the little gold they have remaining

4. Media rules the world-- put them to work

5. Make Gold exclusive and soon it will be like the diamond market (knocked up 300-500% just because they can)

6. Can you eat gold?  Sure, but you'll probably die before too long.

7. Will U.S. be successful in suckering in people to buy gold at two grand an ounce?

8. We'll see.

krogoth's picture
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No Gold Exists

Sorry, no gold left in FRB of NY or US owned by the US, or very little. That's why the FRBofNY or Fort Knox don't allow us to see it or audit it. We would riot if we knew the truth about this scam. When was the last inventory done? I think before Nixon was the last time reporters we allowed LIMITED access to Fort Knox. I don't think the FRBofNY has EVER allowed a public inventory. It's a big con job. Read this total BS.

The Federal Reserve Bank of New York maintains a vault that lies 86 feet (26 m) below sea level, resting on Manhattan bedrock. By 1927, the vault contained ten percent of the world's official gold reserves. Currently, it is reputedly the largest gold repository in the world (though this cannot be confirmed as Swiss Banks do not report their gold stocks) and holds approximately 5,000 metric tons of gold bullion ($160 billion as of March, 2008), more than Fort Knox. The gold is owned by many foreign nations, central banks and international organizations. The Federal Reserve Bank does not own the gold but serves as guardian of the precious metal, which it protects at no charge as a gesture of good will to other nations.

(Krogoth Translation) Never inventoried because if they have gold, it belongs to someone else. Why do we pay taxpayer money for good will to other nations? Can't they build a vault themselves in the origin country? Who does the 5000 metric tons belong to? Where is the breakdown of what we own and what they own? Also, 160 Billion is BS compared to what we are doling out in bailout packages.


The United States Bullion Depository, commonly called Fort Knox, is a fortified vault building located near Fort Knox, Kentucky which is used to store a large portion of United States official gold reserves, as well as from time to time, other precious items belonging to, or entrusted to, the United States of America.

The United States Bullion Depository holds about 4,603 tons (4,176 metric tonnes) of gold bullion (147.399 million ounces. It is second in the United States only to the Federal Reserve Bank of New York's underground vault in Manhattan, which holds about 5,000 metric tons of gold in trust for many foreign nations, central banks and official international organizations.

(Krogoth Translation)So even less value, taxpayer dollars for storing other peoples gold. SO our official gold reserve stands reported at a possible value of $320 Billion dollars, minus what other countries own, which is probably 319 Billion dollars. Peanuts. We will never know because it's run by the Federal Reserve, a private company. But is it not cool that our TAXPAYER dollars pay for the storage of other peoples gold that we cannot see and is owned and profited from by a private company who we don't know who the owners are?

WOW! They got all the bases covered pretty well, these bankers.

The game continues



Davos's picture
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Re: Citigroup says gold could rise above $2,000 next year ...


$2,000.00 HAH! Once hyperinflation kicks in they will be SO wrong. 

Headless's picture
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Re: Citigroup says gold could rise above $2,000 next year ...


You may soon be able to claim some credit for having altered the general public's perception and use of the terms  "cynicism" and "negativity"--as in how "bad" has become "good." (I appreciate the way you think, and I think more people are coming around to your Truth.)

After sacking the world to build millions of houses in the U.S. (for the benefit of financial friends and family), our Mafioso "government" seems to be at it again, using the Gold bugs and the media arm of our armed forces--with heavy reliance on the reliable parrot-isms of the "sack-the-middle-class" financial melodramas (CNBC, etc.)--to disguise the American-elite bonfire of financial, social and moral responsibility as an example of burning the midnight oil: "We will do whatever it takes. These funds are essential. We had some bad apples. Sorry. We're fixing the problem. Want to buy a AAA-rated bond?"

I'm pretty sure, as you suggest, they have a "plan"; its dirty, its unfair, its quintessentially characteristic of American government; which is to say, "Here's to you, here's to me. But if the Lord will let it be(and we can calculate a strategy that is guaranteed to deflect suspicion), fuc* you! Here's to me." 

We have (and have had) some seriously damaged people running this country of ours, such that we've arrived at the point of causing riots in the streets of Iceland!  England! may arrive at a similar fate. And we're giving Paulson, one of the people (I use that term loosely) who fertilized, nurtured, and loosed this financial spawn on an innocent world, trillions of dollars with which to day trade the market in hopes of extracting more wealth from additional victims (and bailout the "national balance sheet"--an oxymoron if ever...); and all as a part of some false-flag scheme to deflect responsibility while claiming "we have to do it to save you, Mainstreet."

I have no inhibitions about suggesting that the entire "goal" of getting every American into  a house was, in fact, exactly the opposite: The old White Guard saw minorities as finally Overcoming (as in "We shall overcome...") the obstacles they have faced; thus, the plan to put huge numbers in houses they couldn't afford (due to the artificially elevated price), ruin their credit forever, and thus leave millions of houses in the U.S. at bargain prices that the Old Whilte Guard could buy up and rent out to the "inferior" races, thus assuring decades more' existence of an indentured sub-class. (This is, in fact, what the outcome is. Was it purposeful? Was it the result of unprecedented incompetence?)

Sounds utterly paranoid, leaving me in the JFK conspiracy camp, but that's how cynical I've become regarding anything representing the U.S. government and their supposed goals... I am a white man who, given the chance, would have been born a more humane shade. (Let's hope Obama doesn't turn out to be a shade of Plantation Pale; it doesn't look good given who he's invited in--save Hillary.)

Yeah! I'm off the deep end tonight. Been drinking with unemployed friends, some of whom got suckered into thinking that if they didn't "Buy today! You'll have to pay twice as much next year. What kind of father are you?," they would forever be rendered among the non-propertied class and their children would have to share the public parks--in lieu of the backyard and the neighborhood--with criminal elements "who can't afford houses--even with no money down. You aren't one of those are you? Sign here."

 With each New and Improved effort by those who have prospered most from the greatest financial distortion of all time (read: Paulson and friends), I am coming to the dark conclusion that anyone who has profited from these past two or three decades of extortion and theft should either give it back (in the case of the innocent beneficiaries) or leave it their next of kin (in the case of the purposeful); a next of kin that should understand they don't deserve a cent and, thus, should immediately act in the manner of the innocent beneficiaries. Who are those people? Let's start with anyone that makes more than $10K x age. Sounds crazy, but only in this Reaganite fantasy world where gravity has been rendered a law that only applies to the "lower class."

America: a country that severely punishes those who work hard and save while rewarding those with a specious claim on their inclusion in that group we hail as Humanity...

 Over and out, assured that tomorrow will bring even more unimaginable crimes in the bright light of a noon Sun on Main Street...

 P.S. Remember that Goldman Sachs has a Queen for every one of your Pawns; if they don't take a Pawn, it's a rouse to engender a false sense of security; they're waiting for a bigger move.



caroline_culbert's picture
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Re: Citigroup says gold could rise above $2,000 next year ...

It looks as though the gov. (wall street) is throwing in everything but the kitchen sink.  I'll be very nervous when they finally throw the kitchen towel over the sink and give us that too...  We're done for.


I believe the U.S. is baiting China with gold now that they are leery of printing more money, to pay our loans,  which increases our debt to China.  The U.S. is using their last wild card.  I'm just wondering what will happen when the U.S. has nothing left to offer China.  How could China be so naive?


We're so screwed.  I bet anything that the U.S. will start selling tangibles in a few years, i.e., land, buildings, etc.  How else can we pay our loans?  If we don't pay our loans, or at least the interest, China will get really pissed, I imagine.  The U.S. probably has a bunch of their top economic hit-men pitching everything but the kitchen sink to them.  Washington think tanks are probably trying to find out how in the world they can get some civil unrest started in China (distractions) and how in the world they can tip the scale.  I'm sure the think tanks are racking their brains trying to figure out what in the world could possibly bring down China... Maybe Russia could help in this regard.  These are some of my unfounded guesses and speculations.  I tell myself that 'I wouldn't put it pass them'.  We've worked both sides in the past, and I think out of desperation the U.S. will do it again--

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