Book Review: Nick Barisheff’s $10,000 Gold

Posted by John Rubino -

Share on Facebook

Tweet on Twitter

One of the many scary things about writing an investment book is the six months that elapse between the typing of the last word and the book’s appearance in stores. That’s enough time for your predictions to be proven wrong or – nearly as bad – for your predictions to come true and make the book’s advice obsolete.

The temporal jury is still out on Nick Barisheff’s $10,000 Gold. Either it will be this generation’s Dow 36,000, a signpost marking a secular top, or a prescient and gutsy call for faith in gold’s fundamentals at a time when many are giving up on precious metals.

The latter is more probable, for reasons that Barisheff, CEO of Canadian gold dealer Bullion Management Group, spells out early on. To hit just a few of the high points: the developed world is grossly over-indebted and is holding a 1930s-style depression at bay with insanely-low interest rates and unprecedented amounts of newly-created currency. In response, the developing world, led by China, India and Russia, is buying up every bit of gold they can get their hands on, with an eye to the inevitable changing of the currency guard when the dollar, euro and yen are depreciated to nothing and the yuan and ruble rise to take their place. This dynamic, says Barisheff, will send gold soaring – though of course it will actually be gold sitting still and the dollar plunging.

As a gold dealer, Barisheff is at his best when clarifying the differences between paper gold like ETFs and unallocated storage and the real thing like coins and allocated accounts. This paper-versus-physical distinction has become front-page news recently, and is a crucial piece of information for new gold investors. The time will come when millions of people who think they own gold find out that they really don’t. This book’s readers will avoid that fate.

In Barisheff’s analysis, the US is in the final stage before hyperinflation, with debt beginning to overwhelm the system while crucial needs like infrastructure are starved to pay for entitlements, overseas military adventures and interest. Here’s how he describes what comes next:

Stage 5 is hyperinflation, the worst economic phase of the fiat cycle, when currency becomes essentially worthless. Hyperinflation has occurred fifty-six times since 1795. During the Weimar hyperinflation, which we will discuss in more detail below, only gold was accepted as reparation payment. Of course, it is probable that a significant structural change will occur, likely involving the formal recognition of gold as money, in order to avoid hyperinflation on a global scale.

Where would gold have to be set to account for all the paper currency now circulating? That’s right, $10,000.

A final note about this book’s production values: The publisher, John Wiley & Sons Canada, has done a great job with the cover art, the graphs and the indexes, while Barisheff’s presentation is clear and logical. This is a polished production from beginning to end, which makes it an easy read. Everyone associated with it should be proud of what they’ve produced.