Peter Schiff sees golden years for gold ahead.
Will the sun keep shining on perma gold bug, Peter Schiff’s, forecast that the great bull run in gold has just started?
Perhaps gold’s greatest tailwinds will come from geopolitics
The Ukraine war is likely to soon conclude with an unconditional surrender to Russia as pockets of resistance are bleeding dry or surrendering.
Russia will soon regain a strategic piece of turf, a logistic energy pipeline hub that can funnel an abundant supply of affordable gas from its territory further westward into energy-hungry Europe. Ukraine is also Europe’s breadbasket.
“The Ukraine war is likely to soon conclude with an unconditional surrender to Russia”
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Russia’s hard power and its military prowess succeeded in defending and retaining its natural resources and logistic hubs. So Europe’s superpower has tremendous leverage over the European continent.
If strategic national interests determine a nation’s foreign policy then a sizable chunk of Europe will willingly ally with Russia.
Russia’s soft power fine-tuned international relations machine is also firing on all cylinders as Putin’s Russia is photographed with Italian Street artists at the World Youth Festival in Sochi.
Russian propaganda is also as good as its chess playing. It takes real skill to convert a 70-plus-year-old leader who invades a country into a modern-day Che Guevara.
So as a Russian superpower both soft and hard is being projected on the global stage more countries could pivot east.
Moreover, with the dollar being politicized and weaponized against those holding their foreign reserves who don’t see eye to eye with a US-centric world the de-dollarisation could accelerate. Think about it. If you are a nation and you believe it is in your strategic national interest to trade with Russia but you are worried about holding your foreign reserves in USD and treasuries because they could be frozen by Washington then physical gold within your sovereign borders is your logical substitute.
“as a Russian superpower both soft and hard is being projected on the global stage more countries could pivot east”
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The golden years for gold could be ahead as nations move away from storing their foreign reserves in USD and into gold because the political risk of holding reserves in the latter could be too high.
If the above plays out then treasury bond yields could head higher along with inflation as the dollar exchange value to gold withers on the vine.
“The central banks are the buyers, and they’ve got huge war chests of foreign currency reserves, plus they can print their own money and use that to buy gold” – Peter Schiff
Peter Schiff sees golden years for gold ahead as central banks buy gold hand over fist
“This rally is the first rally to new highs where the public is not participating. In fact, for weeks—actually months— leading up to the new high, the public was getting out of gold. … I think that’s a great contrarian indicator, and I think that’s a sign that this rally has legs, because normally the market peaks when you get a rush of buyers that come in. And now the market gets overbought, it gets saturated, and then there’s a correction,” he said.
Even more promising for gold is the fact the central banks are increasing their purchases of the yellow metal, and they aren’t planning on selling it anytime soon.
“The central banks are the buyers, and they’ve got huge war chests of foreign currency reserves, plus they can print their own money and use that to buy gold. And I don’t think the central banks are that price-sensitive. … They don’t want to run the price up, they want to buy it, but their goal is to have more gold, and their goal is not to sell any of this gold,” he added.
Supply imbalance; Peter Schiff sees golden years for gold ahead
“The market is undersupplied, and it’s about to run into a huge increase in demand. And what does that tell you? That means that the price of gold has a long way to go to catch up to clear that market. Gold is very undervalued right now, and it has been for some time, and that is the opportunity to buy it before it’s repriced to a realistic valuation,” he said.
“You have a full-court press now on the part of the government to blame the private sector for inflation” – Peter Schiff
Higher inflation is why Peter Schiff sees golden years for gold ahead
“They said 2% is as high as we’re going to allow inflation to be. If inflation gets up to 2%, that’s a problem. And so do something about it! … 2% was the ceiling. It was not a target. It was not a goal. It was a limiting ceiling. It meant don’t let inflation get above 2%. That didn’t mean that if it was 1%, you had to try to get the rate up. …No idiot would have said that if inflation is half a percent, we need to increase it to get it up to 2,” he said.
“You have a full-court press now on the part of the government to blame the private sector for inflation. That is precisely why they lie to the public about the definition [of inflation]. That’s why they’ve told everybody that inflation is raising prices, because if the government properly defines inflation as an expansion of the money supply, then they can’t blame greedy corporations for inflation,” he added.
It ends in price controls, shortages and scarcity as Peter Schiff sees golden years for gold ahead
With a ballooning public deficit and treasury bonds, no rational investor wants to buy bonds so the Fed will end up keyboarding more dollars into existence, thereby pushing up prices as the currency debasement continues Peter Schiff thinks it ends with price controls. But price controls could also lead to bankruptcies reducing supply and leading to higher prices.
“We’re going to have new commissions. We’re going to have studies, and we’re going to go after those bad guys, and maybe we’ll pass new laws and new regulations to stop businesses from raising prices. That is going to happen. Price controls are coming,” he said.
Perhaps it is a bet against failed policies that best sums up why Peter Schiff sees golden years for gold ahead
