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(Kitco News) - Gold’s true-value potential is being held back by market “abuse,” which is why the metal is trading at relatively depressed prices, said Max Keiser, host of the Keiser Report.
Keiser cited the tremendous amount of paper gold in the market as the main problem, as this creates opportunities for short sellers to prevent prices from moving to the upside.
During the trading of gold futures, or paper gold, Keiser said that “there’s a huge gap between when they’re supposed to reconcile these trades and when they actually do, and in that gap there’s a lot of abuse, and that abuse comes with banging the price of gold down in ways that do not reflect the genuine price discovery between buyers and sellers.”
Keiser said that when tracked against historical U.S. debt accumulation, gold should be trading around $2,900 an ounce today if no market manipulation were to occur.
On bitcoin, Keiser noted that the largest cryptocurrency is evolving beyond a store of value to becoming a major institutional currency, and could even dethrone traditional fiat currencies.
“The nation state is dissolving, thanks to bitcoin. The nation state, the units of politics as we know them, is all changing, because now we have a global unit of account, medium of exchange, store of value, where the trade is the settlement,” Keiser told Kitco News.
Bitcoin’s ultimate role will be to replace governments and banks as mediators of exchange as transactions can be settled between counterparties without interference, Keiser said.
He added that by the time bitcoin attains its status as a global unit of account, prices would likely have reached $100,000 a coin and volatility will subside.
Governments will not be able to regulate bitcoin, Keiser said, even if politicians have voiced their concern over bitcoin’s role in replacing the dollar as the “hegemonic force in the world.”