Pretending that bad credit is good credit

Chief Strategist Predicts Record Gold Run

By Leo Lewis
The Times, London
Wednesday, September 19, 2007

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_...

HONG KONG -- It would be the biggest run on gold since the attempted French invasion of Britain of 1797 that sent prices through the roof.

The precious metal, long a safe haven for investors, yesterday was predicted by a leading analyst to quadruple within three years as buyers seek shelter from prolonged turmoil in mainstream financial markets.

According to Christopher Wood, chief strategist at the broker CLSA, market ructions and a collapse of the dollar could send gold prices to more than $3,400 an ounce within the next three years. Gold futures last night hit a 28-year high at $733 an ounce, but are more than $100 short of the record. Mr Wood said that the sub-prime conflagration would be the catalyst for a wider breakdown in markets.

However, Wood predicted that investors would soon realise that the sub-prime crisis is simply the catalyst of a much wider breakdown, arguing that it has been the "Archduke Ferdinand assassination event" that sparks a bigger calamity.

"This is not a sub-prime crisis. Sub-prime has merely exposed the bigger scam of structured finance; a scam that is about pretending that bad credit is good credit," he said.

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