Peter Schiff: We’ve Entered a New Leg of a Gold Bull Market (Video)

During an interview with Kitco News at FreedomFest, Peter Schiff said gold has entered a new leg of a bull market, and he expects the yellow metal to eclipse the highs reached in 2011:

I think this is a new leg of the gold bull market. I mean, gold’s been in a secular bull market since 2000…We had a cyclical bear market that I believe ended when the Fed hiked rates in December. And now we have the new leg of this bull market, which I think potentially could be an even bigger leg than the first leg, which saw gold go from sub-300 to close to 2,000. So, if this leg is bigger than that you can just imagine how high the price might go.”

Peter also reiterated his assertion that the Fed will not raise interest rates, and will in fact cut rates, most likely taking them below zero this time around. He also predicted another round of quantitative easing bigger than QE1, 2, and 3 combined.

At the end of the interview, Peter gets into some presidential politics, noting that even if the next president takes steps to address the problems in the economy, we still have to deal with the consequences of past policies.

We still have a tremendous price that needs to be paid for the mistakes of the past. Even if we correct those mistakes in the future, we still are going to have a day of reckoning. And that day of reckoning is going to evolve a much lower US dollar and a much higher gold price.”

Highlights from the interview:

“I did this same panel last year, and I wasn’t bearish that the US stock market would go way down, because I believed the Federal Reserve would prevent that from happening by keeping interest rates low and by printing a lot of money, and that’s really what’s been happening.”

“Even though the Dow is at new high today, it’s at what? – a two- to three-year low if you price it in real money, which is gold. So stocks are not going up. The value of money is going down and gold proves that.”

“None of the bulls on the stock market were necessarily bearish on gold. In fact, I think they concede the point that with interest rates at zero and the world awash in money, it’s very hard to envision gold prices going significantly lower.”

“What hurt gold up until this year was the widespread consensus that interest rates were heading a lot higher, that the Fed was going to normalize monetary policy and that its balance sheet was going to shrink, that the Federal Reserve was actually going to become a seller of US Treasuries. Now, I’ve known all along that wasn’t going to happen. In fact, the Fed hasn’t sold a Treasury at all. The balance sheet continues to grow as they reinvest all of their interest and maturing principle. But I believe now people are starting to realize that all the anticipated rate hikes are never going to materialize – that the Fed’s tightening cycle is already over. The next move for the Fed is to cut rates, not to raise them again. I think we might actually go negative this time. I think QE4 is going to be bigger than QE 1, 2, and 3 combined. And so I think gold is not only going to retest the highs from 2011 when it was close to $1,900, but it’s going to surpass those highs and move into much higher territory.”

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“I think this is a new leg of the gold bull market. I mean, gold’s been in a secular bull market since 2000…We had a cyclical bear market that I believe ended when the Fed hiked rates in December. And now we have the new leg of this bull market, which I think potentially could be an even bigger leg than the first leg, which saw gold go from sub-300 to close to 2,000. So, if this leg is bigger than that you can just imagine how high the price might go.”

“We still have a tremendous price that needs to be paid for the mistakes of the past. Even if we correct those mistakes in the future, we still are going to have a day of reckoning. And that day of reckoning is going to evolve a much lower US dollar and a much higher gold price.”

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