Mr. Hochreiter took a look at the correlation between Eurozone gold holdings and money supply figures, only to arrive at theoretical gold prices that leave all other gold bull forecasts in the dust.
VIDEO: Austrian economist Gregor Hochreiter paints a picture of the price of gold if the Euro would become 100% gold backed, Anybody against $40,000/oz gold?
- M0 + 8.9% p.a. €781 > €1.831
- M1 + 10.4% p.a. €4,054 > €10,933
- M2 + 8.9% p.a. €9,224 > €21,688
- M3 + 9.1% p.a €10,788 > €25,657
These are theoretical values that may become price targets when the final stage of the disintegration of the Euro becomes doomsday reality. Note that the these calculations are based on end-2008 figures when gold traded at $850.
In the Austrian school of economics inflation is equalled with the expansion of money supply. Hochreiter said that this equals to a loss of purchasing power of 57% since the inception of the Euro. My lying wallet tells me the same story.