Peter Schiff suggests investors go for the gold.
However, this isn’t way to encourage Olympic hopefuls; it is more in the spirit of “head for the hills.”
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The world-renowned investment expert and CEO of Euro Pacific Capital discussed his forecast with the Birch Gold Group, a Burbank, California company that advises its clients to protect their savings and cushion their lifestyles with holdings in gold, silver and other precious metals.
But lest we suspect Schiff was merely preaching to the choir, his remarks prior to the last crisis were prescient. He successfully predicted the last housing crisis that led to a severe global financial crisis and the Great Recession in the US. He warns that worse is to come, and now is the time to buy gold while it is still relatively cheap.
Basically, Schiff says the dollar is dying, and it no longer deserves to be the world’s reserve currency. In addition, the actions of the US government, according to Schiff, led to the recession, but its solutions, including creating ever more debt, might make the next crisis even more severe.
By racking up more national debt, the collateral damage falls on the dollar, as fewer countries will be willing to buy US debt.
Even without the government policies Schiff considers so ruinous, the dollar was an outdated reserve currency to begin with, given the eclipse of US economic dominance by other countries.
He said:
“It’s really a leftover from a different era. The dollar became the reserve currency because we dominated the world financially and economically. We don’t do that anymore. We’re not the world’s biggest creditor, we’re the world’s biggest debtor. We have huge trade deficits, not trade surpluses. We’re bankrupt as a nation; the currency of a bankrupt nation should not be the world’s reserve currency, but it is.”
While some may wonder if fleeing to the Euro and the Yen may be a good plan, Schiff says these currencies are still flawed, and gold remains the best hope for those who expect the worst from the U.S. dollar.
“People should buy gold while it’s still cheap, ” he says. “Because when gold is remonetized, when it’s once again at the center of the monetary universe, when countries are holding gold reserves as opposed to dollar reserves … Central banks have a lot of gold to buy and the price only has one way to go, and that’s up.”
