Gold Heading for $1500, Oil for $150 - Merrill

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“This is a very interesting projection,” said Money Morning Investment Director Keith Fitz-Gerald. “I have no idea what they’re basing their numbers on. But I certainly wouldn’t dismiss it based on everything I know about global trends, and my own proprietary calculations – which continue to suggest far higher prices for oil and hard assets than even Merrill is predicting.”

Gold could reach $1,500 an ounce, since the worldwide plans to bail out the global financial industry are certain to fuel inflation, analysts led by Francisco Blanch at Merrill Lynch & Co. Inc. wrote in a research report.

The Merrill Lynch analysts also predicted that oil would reach $150 a barrel.

In the research note released earlier this week, the analysts said “the unintended consequence of the ongoing financial bailout will be inflationary pressures to the commodity markets.”

The analysts provided no timetable for their predictions.

The $700 billion U.S. bailout – plus the billions of dollars in capital infusions that have been put in place by governments and central banks all over the world – will be highly inflationary, analysts say. Historically, this type of move has been very bad for the U.S. dollar and highly bullish for oil prices.br>“This is a very interesting projection,” said Money Morning Investment Director Keith Fitz-Gerald. “I have no idea what they’re basing their numbers on. But I certainly wouldn’t dismiss it based on everything I know about global trends, and my own proprietary calculations – which continue to suggest far higher prices for oil and hard assets than even Merrill is predicting.”...

Typically, Fitz-Gerald says, analysts put a more-specific timetable on such predictions. But the unprecedented worldwide capital infusions that are part and parcel of the central banks’ bailout plans are dramatically skewing what are normally relatively predictable calculations, he said...

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