As more and more nations turn to printing money or increasing their supply of money, foreign central banks realize that the largest wave of inflation in history will surely follow and gold may be their only protection.
Last week China became the fifth largest holder of gold. Some have wondered if the price of gold was going to drop with the IMF planning to sell 500 tons, but that will be a drop in the bucket compared to the millions of tons that central banks will be looking to buy.
If the IMF does sell their gold, I predict that it will be the end of their influence in the world because the paper money they borrow today will become less and less valuable. The gold they have is the only true value behind their influence. I think they will soon realize this and reverse their plan from selling gold to buying gold.
Gold is at the beginning of a multi-year climb because I think many central banks will turn to gold as the only true source of wealth protection, as the largest experiment in history of paper currency inflation gets under way.
It will soon be evident that the Obama team has led the world into a snake pit by convincing them to inflate their currencies and flood the global economy with cheap money (by lowering interest rates to near zero).
Previous to this global inflation experiment, the world has only seen rapid inflation in isolated nations, which allowed those nations to turn to other currencies that were not inflating. But, in this case all currencies are inflating so there is nothing to turn to but gold.
Now is the time to invest in gold before the herd pushes the price to $5000.