With this idea in mind, Paul Brodsky has expressed what I consider to be the best analysis for gold that I have come across that also includes this idea of new gold-backed reserve currency. This is a must-read and you can read that HERE Mr. Brodsky recently did an interview in which he laid the case for $10,000. Here's the LINK And finally, today the invaluable King World News published some more commentary from Brodsky in which he lays out the math for why $10,000 is his number:
We figured you should take the monetary base and divide it by official gold holdings. That would give you the price in terms of monetary inflation that it would be worth today. Coincidentally, after we came up with that theory we went back and looked at what they used to use, the formula for arriving at the Bretton Woods dollar exchange value with gold at $35 and it was the same formula. So if you were to divide base money by official gold holdings today, after QE2, you would come up with a price just north of $10,000 an ounce.Here's the LINK
Now, there will always be hair-splitting debate over what variable to use in calculating where the reval of gold - and corresponding deval of fiat money - will take place. My publicly-expressed view is $10,000 but I can also make the case for a much higher number. To be sure, as this ultimate "reval event" draws closer, I fully expect that gold will easily go a lot higher than $10,000. But 10,000 is a very safe bet.
In the meantime, I thought I would treat everyone who has not seen it yet to the gold investor's version of pornography, presented by my friend and colleague "Jesse" of Jesse's Cafe Americain: