Caesar Bryan – Tidal Wave of Gold Buying as Confidence Lost
Today King World News interviewed 25 year veteran Caesar Bryan, manager of the Gabelli Gold Fund. Gabelli & Company has $31.3 billion under management and has been around for 34 years. Caesar Bryan has managed the gold fund since its inception in 1994. Caesar had this to say regarding a loss of confidence in the system: “When I started managing gold equities in 1987, gold was in the process of being demonetized. By that I mean central banks were selling. That’s changed. After a long and painful experience, central banks are now adding to gold. With the ‘Great Moderation’ over, people are now beginning to question the money. This is really a very serious situation. Confidence is hard to get and easy to lose, and I hope the authorities are aware of that.”
“I think the 70s situation was somewhat odd because we came off of a fixed ($35) price for gold. There had been no free market in gold and so there was all of this price discovery going on in the 1970s. That bull market ended with panic buying and there is going to be panic buying again at some point in the future. That’s what’s going to happen.
Somebody put it so neatly to me the other day, they said, ‘Look, since 1971 the gold price has gone up 50 fold. The price of gold could double and triple from here quite easily.’ Put into that context you think, yes, especially bearing in mind how much money is being created. If you look at gold relative to financial assets, gold relative to total M3, gold is very undervalued.
We will quite possibly eclipse the mania many of us witnessed in the 70s….
“It will depend on the monetary management of the major economies, but why not? The authorities would have us believe this ease and this money that’s being put in the system could be extracted when we return to so-called ‘normality.’ But my fear is that confidence in the money is going to be slowly eroded.
I don’t know how far that will go, whether it’s a 70’s situation where Volcker came in or whether it’s something worse than that. Only time will tell. So far it’s just been awe-inspiring what has happened. Interest rates around the world are at zero. The ECB’s balance sheet is now 2.7 trillion euros and they are going to do another program next month where they might lend another 1 trillion euros to the banks.
We have been in an experimental period since 1971 when Nixon took us off of the gold standard. We have never been in a period in history where no currency has been tied to gold. So it has been a grand experiment. Of course, this system is now being tested isn’t it?
I think before it’s over, we are going to get to a situation where a great deal more investors, both private and public, are going to want to own some gold and very few do at the current time. So far this has been a very orderly market and before this is over it will get disorderly at some point.
Who would have thought the internet mania would ever be what it was in 2000? It’s always staggering in retrospect. For anyone to have forecasted in 1997 what was going to happen in the internet mania, over the next three years, they would have been deemed ridiculous. But look what happened.
Keep in mind the gold that’s controlled by the authorities could be mobilized at some point and that is something I would look for before this is over.”
Statistics: Posted by DIGGER DAN — Thu Feb 02, 2012 3:59 am
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