"When a country's public debt exceeds 90% of GDP, that is the magic number. You get to 90%, there is no way back, and that is the number that the U.S. is going through pretty much as we speak. It is also the number which the UK has gone through; all of the PIIGS are going through it, as well. They are all going past the 90% debt to GDP ratio. Obviously, Japan is miles past it already. It's up to 200%+. There does not appear, in the historical analysis, to be any great likelihood of getting back from that level of debt safely. There is this strong evidence that above 90% debt to GDP, you will experience either a cataclysmic default or some form of very serious inflation."
So observes Paul Tustain, gold market analyst and founder of BullionVault. In his view, gold serves as a beacon who's price is currently signaling the monetary system is in grave danger. He and Chris discuss the primary factors driving the price of gold and smart strategies for investors looking to build or maintain their holdings of the metal.
Click the play button below to listen to Chris' interview with Paul Tustain (runtime 56m:55s):[swf file="http://media.PeakProsperity.com/audio/paul-tustain-2011-04-08-final.mp3"]
In this podcast, Paul covers:
- The differences between unallocated and allocated buillion and the market problem that led Paul to found BullionVault
- How central banks have recently shifted to become net buyers of gold after a long period of dis-hoarding bullion, and how this – combined with surging private investment – has sent demand for the metal skyrocketing
- Why we're currently experiencing inflation and deflation at the same time: Our monetary policy is pushing more and more money into short-term investments, driving up the price of the things we use today (food, fuel, etc.) and lowering prices of the things we finance over longer periods (like houses)
- Paul's approach to valuing gold and why he sees $3,844/ounce as a defensible (and conservative) estimate of its appropriate value
- Paul's perspective on silver, gold miners, and ETFs
- The purpose and advantages of the allocated custodial bullion purchasing and storage model that BullionVault offers
Click here to read the transcript
BullionVault's Director, Paul Tustain, founded BullionVault as a response to a widespread perception of increasing systemic risk in the financial world. He remains in full day-to-day control, and in his view global systemic risk has become still more acute. He is committed to directing the business in such a way that at every step it retains its first objective of using gold to secure customers against the threats in the international financial system. He is also the editor and publiser of Galmarley.com, a well-regarded and free educational resource for prospective gold buyers.
Our series of podcast interviews with notable minds includes:
- Francis Koster
- Bud Conrad
- John Williams
- Robert McFarlane
- David Collum
- Joe Saluzzi
- Jim Rogers
- Bill Fleckenstein
- Willet Kempton
- Dan Ariely
- Ted Butler