All done in the world to a spike in the gold price

There was uncertainty about the new law on health insurance budget cliff

The last few years of precious metals dealer Tom Cloud (National Numismatic Associates) has earned the reputation of metal guru.

He has been in the business for 35 years and can separate the professionals from the scam, and also tell a good story. We asked him to become a regular contributor to DollarCollapse with weekly series of questions and answers, in which he will talk about events in the precious metals industry for the past week, and mention one or two related topics. This week he explains why the upcoming negotiations on the debt ceiling, it is more important for precious metals than the budget cliff.

DollarCollapse: Hey, Tom. How's it going? Or rather, what do your customers?
Tom Cloud: Phone does not cease. Our customers do not worry so much delay in the budget problems of the cliff, but the fact that up to raise the debt ceiling just two months. I also hear a lot of complaints about the fact that President Obama has closed the issue with the budget cliff, and then immediately showed the American taxpayer expense of $ 3 million for a family vacation in Hawaii.
Another way to have a lot of people pay more attention to precious metals - is the recent news that Japan buys nearly as U.S. government bonds, which both China and currently has them at nearly $ 1 trillion. When the two countries decide to sell, that eventually happens, it will be a nightmare.
DC: Did not we just did not raise the debt ceiling?
TC: The Last Stand of the debt ceiling took place in August 2011, and they said at the time that it will last for more than two years. Korean economist by the name of Dr. SW (Dr. Yoo) published a graph showing the almost exact correlation between increased debt ceiling (red) and the price of gold (yellow). If the ratio will continue to work, raising the debt ceiling by another $ 2 trillion to raise gold to $ 2,000 an ounce.
price of gold
"Raising the debt ceiling means printing even more dollars, a weaker dollar and support gold," said Yu of Korea Investment.
DC: It seems that in the last few months, governments around the world, especially Japan and the U.S., have rejected attempts to control spending and debt, and to immerse themselves in employment and inflation. Your customers agree with this opinion?
TC: Absolutely. People understand that this is not a recession. There was uncertainty about the new law on health insurance and slowing in the U.S., but in recent years each new statement says about the purchases of assets and debt monetization. The Fed increased its purchases to $ 85 billion a month, and the new head of Japan seems to want the same. So that public services are not closed and the problem again postponed. Everything is ready to increase the price of precious metals.
DC: Who is buying?
TC: Retail investors have not yet begun to fly. Most customers buy large, last month I made some of the biggest deals of my career. We accept orders from banks, which I had not seen for a long time. And from the countries. I just sold the country this week, with delivery directly to the embassy. Big and smart money seems to recognize the scale of the problem.