If we would be going back to the Bretton Woods System of 1944, Mike Maloney calculated that the gold price should be at $US 20000/ounce based on foreign central banks only. To calculate this, you divide total amounts of dollars at central banks by the total ounces of gold at the treasury.
James Turk uses a similar Gold Money Index:
Central Bank Foreign Exchange Reserves/Central Bank Gold Reserves = Fair Price of Gold
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Chart 1: US Total Credit Market Debt as % of GDP |
Mike Maloney calculated everything in it (all dollars convertible into gold), then the gold price should be at $US 203000/ounce (see second video). Which is total credit divided by the number of ounces of gold at the treasury.
So basically we went from $US 167000/ounce to $US 203000/ounce from 2008 to 2012. That’s a huge amount of money printing, while the gold at the US treasury hasn’t increased one bit.
Conclusion: there is still a boatload of upside in the gold price (GLD) (PHYS) and the silver price (SLV) (PSLV).
Here is the interview of GBI (Gold Bullion International) on 5 March 2012.