Why Gold Has Nowhere To Go But Up
The fiscal situation in the state of California is insane. Truly, truly insane. I heard somewhere that if you added state budgets to the federal budget, debt-to-GDP of the U.S. is something like 160% – worse than Greece.

And I don't think that these circumstances are restricted to Europe or the United States; I think that we have a crisis of expectation around the world, really, in terms of the collective ability to address various concerns. I think that democracies tend to live well beyond their means; and I suspect that will mean that the currencies they use will continue to be debased. So I suspect we're going to see a revolving series of crises that will play into gold's hands.

There's something else very important for people to understand: gold is a store of wealth and a medium of exchange that has no constituency for devaluation.

Consider the United States dollar: it'll go lower, but the United States is still the largest consumer of goods and services in the world. The Chinese have made it very clear that tying their currency to our currency is a development strategy – they're trying to provide employment for their people by selling stuff to us. If the yuan doesn't appreciate, then the other four principle Asian currencies can't appreciate relative to the dollar. If none of those currencies appreciate, neither can the euro; because Europe would become a dumping ground for goods that were diverted from America, and the Europeans would lose their access to U.S. markets.

Most of the developing nations' currencies are caught in the same sort of vortex.

What's interesting then is that every national government has some incentive to devalue – to protect their own domestic economy and employment.

Gold has no similar constituency for devaluation. That's an important reason why I'm attracted to gold, going forward.

Source: Casey Research interview with Rick Rule.