Jim Cramer's Gold Gene

According to Kitco, Jim Cramer has predicted a 15% increase in the price of gold.  I last bought a physical ounce of gold in the fall of 2018, when the price dipped to $1,165.  It is currently above $1300.  I don't know where the price will go. Jim Rogers believes that it will fall back to $900, where it was in 2008.  I'm still a buyer at $1300, but not much above. I had bought some gold investments in the 1300s a year or two ago, and some are still in the red, but the inflection point seems to be approaching.

I once ran into Jim Cramer on the New York City subway.  There was this dapper guy standing in front of me while I was half napping, and I kept thinking that he looked familiar. I finally roused myself out of my torpor and asked him, "Do you work at Brooklyn College?"  He replied in a whisper, "Television Show." 

I like his show, but I don't watch TV often.  I see Cramer as a voice of Wall Street. Hence, when Kitco quotes Cramer as follows, there is reason to think that a bull market in gold is near:

Don’t listen to the Fed watchers who claim that Powell caved to the stock market or the president...The only thing Powell caved to is reality … This is about the economy — who doesn’t want a healthy economy? If Powell had stuck to his plan for a series of lockstep rate hikes, it would’ve been a lot more devastation to Main Street than to Wall Street. 

It pays to read between the lines when listening to Wall Streeters talk about the Fed. If they ever told the truth, there would be a revolution.  What Cramer is saying is that short-term economic contingencies are making long-term dollar declines necessary.  That means that gold will rise.  The $1500 price target is a short-term prediction based on Cramer's intuition or inside information.  The ultimate price of gold in our lifetimes is likely to be much higher.  That's because of massive indebtedness.

My late friend Howard S. Katz used to talk about a commodity pendulum, whereby monetary expansion causes low-interest-rate borrowing by miners, who overexpand.  That crushes commodity prices in the short run. In the long run the miners go bankrupt because of the competition from the overexpansion, and the declining supply leads to sharp price increases. 

My guess is that there will be a short-term bubble, perhaps to $1500 as Cramer says, then a downturn, perhaps as far back as the 1100s, but not necessarily.  This will punish short-term buyers, making it easier for insiders to buy at a cheaper price.  Eventually, we will be seeing much higher prices in gold.  It is debatable whether an ultimate dollar collapse will lead to a new gold standard. If it does, we could see $10,000 gold, so my 2010 prediction of $3,500 may have been too low.