Gold heading to $1,500: Do the math, says Santiago Capital - Wealth Managers

"There's a very high correlation between the monetary base, the national debt, and gold"

Santiago Capital CEO Brent Johnson told CNBC in an Oct. 24 appearance on "Futures Now" that gold could hit $1,500 again by the end of the year:

"I don't know that gold is necessarily going to outperform stocks in the short term. I think QE is here to stay, and I think as long as they keep pumping that much money into the market, equities can go up. But I do think that gold is towards the very end of its correction this year. I expect gold to go much higher, even before the end of the year and on into next year. I don't necessarily think equities are coming down anytime soon, but I do think the correction in gold is largely over. ...

"My kind of unofficial tagline is: You either believe in math, or you believe in magic. I happen to believe in math. And the projection that our U.S. debt level is on is starting to go exponential -- and the way the system is designed, it's designed to increase even more. ...

"There's a very high correlation between the monetary base, the national debt, and gold. For the long-term picture, that's the main driver. There's a lot of other key drivers as well, but that's the big picture for me. ...

"It wouldn't surprise me to see us back at $1,500 or $1,550 by the end of the year. ...

"A number of different firms around the world are saying 'Sell gold,' that it's a 'slam dunk sell,' so there's still a lot of negative sentiment out there. And there are a lot of shorts out there. ...

"You can get a bit of a pop, and all of the sudden those shorts start to cover, people start to realize that QE is here to stay and not going anywhere, and things can change very quickly. I mean, gold can go up just as quick as it came down."

When does tapering start? "Never. The only way they can taper is if they come up with some other system to continue increasing the monetary base. Now, they can call it what they want, but they cannot stop the easing."

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