Thursday, September 16, 2010

Citigroup (NYSE:C) Sees $1,300 Gold in a Week

With one caveat, Citigroup (NYSE:C) says within a week we could see gold hit $1,300, and the caveat is if the Federal Reserve in the U.S. announces they're going to implement quantitative easing again.

If that happens, all bets are off as to how high gold prices could go, as gold prices today broke another all-time record, and that will continue to happen on a consistent basis.

The reason this will happen is the U.S. government and Federal Reserve through all that they had with the over $1 trillion already spend in an attempt to battle the recession. It didn't work. They have nothing left to throw at it be more money, which will result in the price of gold continuing to skyrocket.

Repercussions from the original stimulus spending are starting to be felt, as the core Producer Price Index in the U.S. increased 0.4 percent in August, part of the reason for the surge in gold prices today.

The U.S. government and Federal Reserve are drunk with spending, and like an unrepentant wino, think another drink won't hurt them.

Even some of advocates of the first Obama stimulus, like Alan Greenspan, are calling for the government and central bank to stop the madness and let the market heal itself; something that should have been done in the first place.

They won't, as they think one more drink, or spending spree, won't hurt them. This is why we can be confident going forward gold prices aren't going to go anywhere but up. Nightcap anyone?

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