A Retort to SocGen’s Latest Gold Report

http://www.sprottgroup.com/thoughts/articles/a-retort-to-soc-gens-latest-gold-report/

SocGen: Gold Could Surge Over 500%

http://www.businessinsider.com/socgen-could-gold-go-as-high-as-8500-after-qe3-2012-6#ixzz1yNXO7RbP

Societe Generale is "enthusiastic on gold" -- so much so that in their latest cross-asset strategy report, they call "buy gold ahead of QE3" their number one strategy, saying it's "the perfect asset to benefit" from additional loose monetary policy. 

In the report, SocGen discusses the historical relationship between the price of gold and the U.S. monetary base. The SocGen team writes that "if gold catches up with the increase in the monetary base since 1920 (as it did in the early 80s), its price would rise to USD 8500/Oz," adding that just "to close the gap with the monetary base increase since July 2007, gold would have to rise to $1,900/oz, assuming full transmission from the monetary base increase to the gold price."

Japan about to implode

The huge debt load will finally crater Japan, sending shockwaves throughout the financial world, according to Dylan Grice of Societe Generale.

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100002951/a-global-fiasco-is-brewing-in-japan/

Societe Generale

Societe Generale is one of France's largest banks with a worldwide presence, so they aren't some fly-by-night operation. For a mainstream investment bank to release this to their clients is astonishing. Investment banks don't make money by pitching gold--they don't earn fees from gold purchases by the investing public (they earn a commission when investors buy gold equities, but that is a disproportionately small sector--which, by the way, works to our advantage when the public rushes in and bids up prices of gold mining shares).

http://www.telegraph.co.uk/finance/economics/6599281/Societe-Generale-tells-clients-how-to-prepare-for-global-collapse.html

One-by-one, major investment banks will tout gold, driving up prices going forward. Bank of America's Merrill Lynch became a gold bull last week.

I'm waiting to see when Dave Ramsey pumps up gold--that would signal a market top. Until then, I'm going to watch the fireworks in the COMEX precious metals pit.