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Why Gold Should Rise And Exceed Previous Highs

Published 11/23/2014, 01:34 AM
Updated 07/09/2023, 06:31 AM

Are Russia and Europe buying more Gold? Will the Swiss vote ‘yes’ in its gold referendum? Is there a chance for QE4? Peter Schiff is on Kitco News to comment on some of the most recent headlines surrounding the gold market and also to share his thoughts on the U.S. economy. The Euro Pacific CEO says the U.S. recovery isn’t real and adds that the dollar is only strong because all other currencies are weak.

About the dollar’s prospects:

The dollar isn’t really strong, it’s just that temporarily other currencies are weaker. I think people are worried about the yen, they’re worried about the euro, and so the dollar wins by default. They say, ‘Well it’s the cleanest shirt in the hamper.’ But it’s actually not. It’s actually the dirtiest shirt in there, people just don’t appreciate that yet. It’s only because the euphoric effects of our last round of QE haven’t worn off yet.

About the inflation vs deflation target of central banks:

If the ECB is going to buy more gold – which I think would be smart, because I think the price is going to go a lot higher – it’s not to counter low inflation. Maybe that’s what they’re talking about, but low inflation is not a threat. It’s high inflation that’s a threat. Low inflation is good, the lower the better. In fact, if prices go down, that’s even better for your economy than when prices go up.

Peter Schiff his gold target:

I have had that target of gold at $5,000 in my mind for some time, and I think we’re going to eclipse it. I think that when this decline is over – and it’s been three years since gold hit its high around $1,900 – I think it’s actually going to rise faster than it fell. Normally markets take the stairs up and the elevator down. Well, I think that gold is going to take a rocket ship back up. Because I think that when all the people who have been shorting gold and selling gold realize that they have got it wrong and they want to buy it back, it’s just not there. I think all the gold that was dumped out of the ETFs is sitting in vaults in Russia and China, and it’s never going to see the light of day again. So when the buyers want it back, the gold is not going to be there.

Drivers which will drive gold to $5,000:

Reality is what will drive gold to new highs. People are oblivious to the fact that it’s QE-infinity, that all the major central banks around the world are promising inflation. Once upon a time, central banks promised price stability, and they were willing to put interest rates up to 5, 6, 7, 8 percent to maintain stable prices. Now they are saying that stable prices are dangerous.

This is the best fundamental environment I have ever seen for gold. And I also think the dollar’s days as the world’s reserve currency are numbered. When the dollar is no longer accepted as the reserve currency, what’s going to take its place? It’s not going to be the euro, it’s not going to be the yen. I think it’s going to be gold.”

About Alan Greenspan his recent comments on gold:

Alan Greenspan recently said that he thought gold was a currency. He is wrong; gold is not a currency, gold is money. When the dollar was backed by gold [when we had legitimate Federal Reserve notes, which is when you could hand in the notes and get back gold] then we had currency and currency is backed by money. Fiat currency is now backed by nothing. So the world is awash in fiat currencies and you need real money to back currencies. That is going to be gold.

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