Growth in public debt of developed countries in the next two years to $ 10 trillion, caused by the struggle with the crisis and stimulate the economy, may lead to a drop in the dollar and oil prices, as well as make risky all investments in U. S. assets and the EU, the report said the French bank Societe Generale , released last week.
According to the report, "The worst case scenario the debt, " the authoritative French bank, in the next two years the UK public sector debt will rise to 105% of GDP, while in the U. S. and the eurozone countries - up to 125%. Japan's public debt during this time may increase to 270% of GDP. According to analysts SocGen, in general terms, the amount of debt in all countries of the world for a two-year period would exceed $ 45 trln.
With increasing national debt will increase the debt burden on individuals: at Societe Generale estimate, That the same U. S. under the most optimistic scenario, take 9 years to the debt and the income of citizens has reached level 80.
Summarizing the current trend, the report's author Dylan Grice concludes - as a result of such development processes of the world economy will accelerate the fall of the dollar, gold prices will set new records, while the oil will return to the level of $ 50 per barrel in 2010 godu.
Global strategist at SocGen believes that the price of gold over the next decade could reach $ 6300 per ounce. The fact that the United States, the largest holder of gold in the world, owns about 263 million troy ounces of gold, while the monetary base of the country reached $ 1. 7 trillion. Thus, the price of the metal in which the dollar would be fully backed by gold, is in the area of $ 6000 per ounce. The report of the bank notes that gold at the moment is very cheap, considering that at the current value of the dollar backed by gold by only 15%.
Grice drew attention to the fact that the record U. S. budget deficit and the unprecedented amount of liquidity pumped into the Federal Reserve banking system of the country, puts the United States under the threat of another rise of inflation, similar to that observed in the late 1970's - early 1980's. During this period contributed to the weakening dollar meteoric rise of gold quotes: in the early decades of the troy ounce was worth about $ 40, but by the end of 1979 as a result of a succession of crises and inflation soared gold quotes close to $ 400-500.
The report concludes by Societe Generale recommends its customers to sell dollars, to reduce positions in shares of the tech sector and manufacturers, as well as draw attention to gold as a safe hedge against the dollar.
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