Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

It’s Going to Be a Rush to Gold; The Dollar Is Cooked

  by    0   0

On Wednesday, Congress finally agreed on a government stimulus/bailout plan to battle the economic impacts of coronavirus to the tune of over $2 trillion. Meanwhile, the Federal Reserve has committed to monetize the debt with QE to infinity. Practically speaking, we’re talking about trillions of dollars being injected into the US economy – all of those dollars created out of thin air.

So, what does all of the money creation and government spending mean for gold?

Peter Schiff said that with the central bank and government response to the coronavirus, hyperinflation has gone from being the worst-case scenario to the most likely scenario. If that comes to pass, gold will go through the stratosphere.

Right now, the demand for dollars and dollar-denominated assets is high. But how long will that last once the printing press gets fired up?

“What the Federal Reserve has basically told the world is if you’re an owner of US Treasury bonds, you need to sell them to us because we’re going to buy the entire bond market,” Peter said in an interview with Fox Business.

In a podcast earlier this week, Peter said he thinks people will eventually start dumping dollars.

Nobody can hold dollars. Nobody can hold any bonds denominated in dollars. This is now like a game of musical chairs where nobody wants to get caught with dollars when the music stops playing.”

And when that happens, what will they buy?

Gold.

What else are they going to do? I mean, what are they going to use as an asset? They’re not going to just swap dollars for euros or swap dollars for yen. They’re going to just buy gold.”

Everybody knows the Federal Reserve is about to flood the world with dollars. It is talking about “unlimited QE.”

The price of gold fell sharply as the stock market sold off over the last few weeks. This led some people to question gold as a safe-haven. But a drop in the price of gold during a stock market selloff isn’t unusual. In fact, it mirrors gold’s performance in 2008.

The price of gold actually dropped a lot more steeply during the 2008 meltdown then it has in the midst of the coronavirus stock market selloff. The price of the yellow metal dropped 29.5% between March 2008 and November 2008. Silver’s crash during that time was even worse. It lost 57.6% in seven months. Then both metals started to recover as all the quantitative easing and monetary stimulus kicked in. Over the next three years, between 2008 and 2011, gold gained 166%. And silver increased by a staggering 448.4%.

So, if you look at the performance of gold and silver in the midst of this crash compared to ’08, the metals are doing quite well. At the lowest point, gold was only down about 2% on the year.

Gold surged as the Fed’s QE announcement sank in. And if history is any indication, it will push even higher as the monetary and fiscal stimulus begin to surge through the pipeline.

“Gold is acting in this financial crisis the way it acted in the last financial crisis. Except gold is much stronger in this crisis.” Peter said.

The sale of physical gold has gone through the roof. SchiffGold has had to implement minimum orders and is warning that shipments could be delayed.

It’s going to be a rush to buy gold because everybody knows the dollar’s cooked now. Or if they don’t know it, they’re going to figure it out. Because what the Fed just did guarantees the destruction of the dollar. Because it means everybody who owns dollar-denominated debt, whatever kind of debt it is, is going to be giving it to the Federal Reserve for sale.”

Download SchiffGold's Gold vs GLD EFT's Guide Today

Get Peter Schiff’s key gold headlines in your inbox every week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

Related Posts

Government Policy Changes Should Boost Indian Gold Market

Some policy shifts recently announced by the Indian government in its Union Budget will likely have a positive impact on the country’s gold market. India ranks as the second-largest gold-consuming country in the world, second only behind China. The three key policy changes that will likely affect the gold market are:

READ MORE →

Fed Expands Record Holdings of US Debt

The Federal Reserve expanded its record holdings of US Treasuries in the fourth quarter of 2020 as it continued monetizing the massive federal debt. The Federal Reserve added another $253 billion to its Treasury holdings in Q4 according to the Fed’s Treasury International Capital data released on Feb. 16. That brought the central bank’s US […]

READ MORE →

US Treasury Department Set to Unleash Another Tidal Wave of Inflation

The Federal Reserve increased the money supply at a record rate in 2020. And a move recently announced by the US Treasury Department will mean even more money flooding into the marketplace. In other words, another tidal wave of inflation.

READ MORE →

The Fed Just Keeps Getting More and More Dovish

Is Jerome Powell the most dovish Fed chair yet? Peter Schiff said he wasn’t when he first took the position and was raising interest rates. But he is now. The minutes from the January FOMC meeting released last week bear this out. “We’re all doves now. That is the problem, the Fed gets progressively more […]

READ MORE →

Kansas Bill Would Make Gold and Silver Legal Tender in the State

A bill introduced in the Kansas House would recognize gold and silver specie as legal tender and repeal all taxes levied on it. The legislation would pave the way for Kansans to use gold and silver in everyday transactions, a foundational step for the people to undermine the Federal Reserve’s monopoly on money.

READ MORE →

Comments are closed.

Call Now