Jim Cramer: Gold is the Only Currency

Posted by  – Thursday, September 20th, 2012 via Wealthwire


Central bank easing has incredible impacts on gold prices — and now that quantitative easing policies are being adopted in countries all over the world, you can expect more gains for gold ahead…

Frank Holmes, CEO with U.S. Global Investors, backs this argument, along with esteemed former hedge fund manager Jim Cramer.

In the United States, the Federal Reserve has resorted to an open-ended quantitative easing plan, while the Bank of England is about to follow suit with their QE policies; the Bank of Japan announced yesterday their decision to expand their system of quantitative easing; and the European Central Bank has suggested a motion to purchase bonds in order to help debt-ridden nations and attempt to give the euro a boost.

Every time something like this has happened in history, gold prices inevitably surge against the fiat currencies…

Just take a look at the past several years of gold’s historic bull run, tied directly to quantitative easing and the depleting value of the previously dominant monetary bases: both the decline of the dollar and the euro.

Smart investors are preparing for the value of their money to shrink: They’re hedging inflation with gold.

From the sounds of things, we’re in store for a serious gold upswing in the next few months, especially.

“If you go back 35 years, gold historically rises between August and February,” Holmes said. “So you have that wind at your back.”

Jim Cramer recently spoke with journalist Debra Borchardt about his confident gold bull mentality. Borchardt asked Cramer how high he anticipated gold to climb as a result of our international “race to debase” with every country deflating the values of their fiat currencies…

Cramer responded that gold is the only currency anyone can truly trust, especially because of its “tremendous scarcity.”

He went on to say the supply and demand situation alone is enough to send gold prices to $2,000.

Rogers says you should invest in gold instead of merely trading it. Instead of going for miners, you should go for the real thing: gold bullion. He went on:

… I am a big believer in physical gold, but the average investor doesn’t have the money to buy physical gold. I am not as suspicious of the ETFs. There is a lot of gold out there. You’ve got to pay up. The ETF had worked very well. That would be a first class debacle if that happened.

I’ve been very wise to it, that’s why I say, I’ve checked with gold dealers. I can’t own things now, but the one that I always used…

Jim, you’re crazy to recommend the GLD, but that has been the sales pitch now for years from the gold dealers and I’m not buying it.

Nonetheless, Holmes asserts his strong belief that gold stocks are gong to “put on a great performance” within the next 12 months of this quantitative easing madness.




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