While I may never understand how this is possible, JS says that the gold price of $1650 and the target year of 2011 has been in his calculations from early in his career. I believe he said something to the effect that it is based on “math and the markets.” We know that he predicted in advance the 1980 top in gold within a few dollars, so I tend to believe him, despite being unable to grasp how he arrives at his figures.

During the question and answer period, someone asked what was the probability that his time and price predictions were off, and in which direction would his predictions err. His response was that if he was wrong, the price would be higher, and the time frame sooner. I gathered from his subsequent comments that he believes it is quite likely that the price will be higher, and sooner. He has made conservative predictions, not wanting to mislead anyone. One of the quotes I wrote on my notepad is: “When price preceeds time the price projection is likely not estimated high enough.” If memory serves me correctly, he has stated a few times in the past that we have run to and exceeded the “angels” (magnets or price targets) faster and more easily than anticipated, entering a runaway stage of the gold market.

Tying in with this issue of price and time targets, I should note his statement that money and fiscal stimulus can get out of hand, and that these efforts are partly controlled by psycology. While I’m all for a higher gold price sooner, too much of a good thing could work against us. If market psycology breaks down, I believe this will threaten the timeframe and plans which we have been discussing, and the gold certificate ratio might have to be put in place far ahead of schedule (thereby freezing the dollar’s decline and gold price’s ascent at that point). So, perhaps we should applaud the efforts of our leaders who are trying to smother each new economic crisis that breaks out, and lull the investing public into a belief that everything is under control and, “it will all work itself out.”  In the meantime, gold marches ever higher while we accumulate mining stocks and metal.

Jim mentioned the possibility of a large spike in price. I know some people here rub their hands in glee at the idea, but as Jim reminds, price spikes are typically followed by an equally “violent reaction” (meaning a sharp correction). A slow but steady increase is sustainable, and is better for we who are long the metals and the shares. I am unclear about his comments that followed the mention of a price spike. I am not sure if he felt that after a spike and a correction the price would continue its upward journey, or whether the spike and fall would indicate such market distress that it would demand the immediate institution of the Gold Certificate Ratio.

2011 is not very far away, so if all things play out as Jim says, those of us who have patiently held through the wild price swings and the long, morale-shattering corrections, will be rewarded. We will probably laugh someday over the very things we are crying over today.