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Peter Schiff: The Path of Least Resistance for Gold Is Up

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In a recent interview on RT Boom Bust, Peter Schiff talked gold.

In a piece he wrote for the December issue of the World Gold Council Gold Investor, WGC chief market strategist John Reade outlined several key reasons he thinks gold will shine in 2018. He said rising global income will be the primary factor pushing demand for the yellow metal upward in the next year.

Peter put a little different spin on Reade’s analysis, saying it’s not just rising incomes in places like India and China that will help boost gold. Global inflation will play a key role.

Remember, a lot of the income is a function of more money. If people earn more money because central banks create more money, they use their additional incomes to bid up prices on everything. So, I think a lot of prices will be rising, not just the price of gold. But I do believe that as more people perceive the threat of inflation and see the dangers of what the central banks have been doing, I think the price of gold will rise faster than a lot of other prices as people embrace it as a hedge against inflation and as a store of value.”

Echo Base Partners founder Vince Lancey said he expects gold to hit $1,700 per ounce in 2018. Peter said he didn’t know if that prediction was accurate, but he does expect gold to rise.

I think eventually it’s going to take off. It’s hard to know exactly when that is going to happen – whether it happens in 2018, or 2019, or 2020. But I don’t think you have to know to profit from it.  I think you just have to buy it. The path of least resistance for gold is up. And it’s been creeping higher ever since the Fed first started raising interest rates back in December of 2015. Everybody’s been expecting the price of gold to go down, yet it continues to climb the wall of worry.  But at some point, you’re going to get more buyers coming in off the sideline and the price is going to take off. But before that happens – just buy now.”

Peter also touched on the impact of the Republican tax plan, emphasizing points he’s made several times as the bill wound its way through Congress. He said without spending cuts, the tax cuts are going to increase the already ballooning national debt.

Rising budget deficits are very bearish for the dollar because they mean the Fed is going to have to print a lot more money to buy up all the bonds that the Treasury is going to have to sell to replace the tax revenue it lost.”

Peter and Bianca Facchinei closed out the interview talking about the relationship between Bitcoin and gold. Peter said he thinks a lot of people who might normally buy gold have invested in Bitcoin because the gold market has been so quiet.

I don’t think that has done much to depress the price of gold, but I think it’s done a lot to cause the price of Bitcoin to skyrocket. I think probably one of the most dangerous things for Bitcoin if you’re involved in the bubble would be a big increase in the price of gold, because once the price of gold begins to move, now people want to own real gold. They don’t need to own what they believe to be digital gold, but what I believe is nothing more than fool’s gold. So, gold going up could really be the pin that pricks the Bitcoin bubble.”

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