MAX KEISER - GOLD PRICE Will RISE When The STOCK MARKET BUBBLE POPS

The deregulation of the financial system during the Clinton and George W. Bush regimes had the predictable result: financial concentration and reckless behavior. A handful of banks grew so large that financial authorities declared them "too big to fail." Removed from market discipline, the banks became wards of the government requiring massive creation of new money by the Federal Reserve in order to support through the policy of Quantitative Easing the prices of financial instruments on the banks' balance sheets and in order to finance at low interest rates trillion dollar federal budget deficits associated with the long recession caused by the financial crisis. surveillance White House task force report on spying and snooping.

Peter Schiff: I think it's a disaster. Very few people perceive just how big a disaster it is. Most people think the U.S. economy is recovering, maybe a bit more sluggish than they would like. People talk about a jobless recovery. But the reality is it's not a recovery at all. We are not recovering from anything. The country is getting sicker.

The U.S. economy is really all screwed up. It's the result of mainly monetary policy, but fiscal and regulatory policies are part of the problem. I think the major part of the problem is the central bank. The central bank is basically trying to accommodate bad fiscal policy, bad regulatory policy. They are trying to provide a stimulus to the economy to negate the sedative that is being applied by the government. But it's actually making the problem worse.

Mr. Schiff: One of the problems we have in America is that interest rates are too low. We don't save enough, we spend too much, we borrow too much, we don't produce enough. So we have these huge external imbalances where we borrow from the rest of the world. We have to import goods, because we don't invest in productivity.

As we showed back in April, the marginal cost of production of gold (90% percentile) in 2013 was estimated at between $1250 and $1300 including capex. Which means that as of a few days ago, gold is now trading well below not only the cash cost, but is rapidly approaching the marginal cash cost of $1125... Of course, should the central banks of the world succeed in driving the price of gold to or below its costs of production (repressing yet another asset class into stocks) then we fear the repercussions will backfire from a combination of bankruptcies, unemployment, and as we have already seen in Africa

Which means that of the following mines (as we showed here) which make up the gold cost curve,one by one, starting on the right and going left, production is going to go dark, even without the recent demand by South African gold miner labor unions to have their wages doubled. Until eventually virtually no gold will be produced.

It is at that point where one must apply the New Normal supply and demand curve, when one can predict a $0 per ounce price for gold, as physical demand continues unabated, while actual physical, not paper, production has now started going offline.

Joking aside, not even Bernanke, Yellen, or all the paper Gold ETFs in the world will be able to do much to suppress gold prices from reaching their fair value when gold production hits a standstill, and when demands, especially by China, is still in the hundreds of tons each year.

former Congressman Ron Paul warned that if the US continues on its current course, the dollar will collapse, and gold will literally be priceless.

"Eventually, if we're not careful, it will go to infinity, because the dollar will collapse totally,

Demand for gold in China, which broke consumer records in 2013, could reach new heights in 2014, according to some analysts.

That may surprise investors who wonder whether yearly Chinese gold consumption of over 1,000 metric tons is sustainable. Record Chinese buying was driven partly by steeply lower prices in 2013, as Chinese bargain hunters snapped up coins, bars and jewelry. ponzi scheme