Gold prices may have risen for more than a decade and surged in the last few years. But hedge fund manager Kyle Bass's prediction for 2012 and beyond is that prices still have a lot further to go.

In a recent interview with CNBC, Bass said the pattern of governments printing money to get rid of debt burdens has been set.

As governments print money at an alarming rate while the supply of gold is stable in comparison, the logic is that gold prices must therefore rise relative to fiat currencies like the U.S. dollar.

Others agree with parts of Bass' assessment.

Jonathan Ruffer, a UK-based hedge fund manager, similarly thinks the only way governments can get rid of their debt burden is by printing money, debasing their currency and setting off inflation, according to an interview he gave to Risk.net.

Bass and Ruffer are right that public debt has exploded in the last few decades. They are also correct in that governments have resorted to money printing in response to the economic woes caused by over-indebtedness.

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Data from http://www.usgovernmentdebt.us, chart made using Microsoft Excel

Bass was asked in his CNBC interview if international demand for gold will wane if economies in emerging market countries falter.

From 2000 to 2010, emerging market consumers were the largest source of demand for gold, according to research from GMO LLC, a global investment firm.

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Bass answered that India suffers from inflation problems, so even if its economy suffers, its citizens will still buy gold.

Moreover, if China suffers a severe economic reversal, its central bank would be forced to print money and stoke inflation in the process, Hugh Hendry, a Scottish hedge fund manager, said in a recent Barron's interview.

Incidentally, Bass's hedge fund Hayman Capital, Hendry's hedge fund Eclectica Asset Management and GMO LLC all accurately foresaw the 2008-09 global financial crisis.