US economist Peter Schiff believes the Fed will take the same measures in the next recession as it did after the last crisis. The realization that the Fed has no exit strategy will cause gold to rise much higher.
Gold price: many all-time highs
The gold price has marked new all-time highs in numerous currencies. Last gold was in euros as expensive as never before. Measured in the international trading currency US dollar, the price of gold is currently $ 1,540, 20 percent below the record high of September 2011. The US economist, journalist and fund operator Peter Schiff believes that it can not be too long before the price barrier falls again. His thesis: The gold price will continue to rise, because the Fed in the coming recession, the interest rates must go back to zero and return to quantitative easing back – so money flushed through asset purchases in the markets. And he believes the gold price will not stop rising this time.
“Fed has no exit strategy”
In an interview with RT America, Schiff states: “When the Fed first started Quantitative Easing, the price of gold stopped at $ 1,900 because everyone believed that the Fed had an exit strategy and they were reversing the process, normalizing interest rates and taking stock could break down again. When people realize that they are wrong in the belief and realize that there is no exit strategy, that we are practically experiencing quantitative easing for all time, that the balance will grow forever, the gold price will not stop next time , He will go on and on “.
Return of QE
Because the only way to stop an expected stock crash is to print more and more money. And that’s good for gold. And he assumes that silver might even be the better buy now. “It’s even further away from its highs,” Schiff said. In the long term, the ship sees a return of gold as a means of currency coverage. “Do not wait until the time comes,” he says. “If gold is re-monetized, then the price will be much, much higher than today.”
Stay on the ground
Our assessment: “This time, everything is different,” we’ve heard so often in euphoria on the financial markets. The trees do not grow into the sky, even in terms of gold. In the short term, the factors that have led to the recent rise can be reversed – especially the USA / China cause. Wealthy people will need gold as insurance in the coming years. However, in order to calm the financial markets temporarily, central banks will make even more drastic decisions in the next crisis than before. Keywords: Negativzinsen, “helicopter money” (large-scale money gifts) and who knows, possibly even gold trading bans.