"It is very scary: the flight to gold is accelerating at a faster and faster speed," said Peter Hambro, chairman of Britain's biggest pure gold listing Petropavlovsk.As a point of reference gold is presently selling for just shy of $1600 an ounce and silver is at about $39 an ounce.
"One of the big US banks texted me today to say that if QE3 actually happens, we could see gold at $5,000 and silver at $1,000. I feel terribly sorry for anybody on fixed incomes tied to a fiat currency because they are not going to be able to buy things with that paper money."
QE3 would be the third round of an infusion of dollars (actually electronic credits) into the money supply to buy government debt which we're going to have more of because the president and his party refuse to stop spending money we don't have. The more money the Fed pumps into the economy the less it'll be worth and the more people will look to convert their rapidly depreciating dollars into something that will hold its value.
Evans-Pritchard leaves us with this observation:
Step by step, the world is edging towards a revived Gold Standard as it becomes clearer that Japan and the West have reached debt saturation. World Bank chief Robert Zoellick said it was time to "consider employing gold as an international reference point." The Swiss parliament is to hold hearings on a parallel "Gold Franc". Utah has recognised gold as legal tender for tax payments.This is an indication that people around the world are losing confidence in the American government's willingness and ability to properly manage its economy. The rush to gold means a loss of faith in the dollar and there's no other currency right now to take its place.