It is “ironic” that gold, once dismissed as a useless liability by many top economists and investors, is “now considered an asset” as its price surges amid the Covid-19 crisis, former Wall Street stockbroker Max Keiser told RT.
Bank of America analysts said Wednesday that the precious metal could hit $3,000 per ounce in 18 months as economic outputs contract sharply. With fiat currencies coming under pressure, “investors will aim for gold,” the bank said, in a report titled “The Fed can’t print gold.”
For years, high-profile bankers and investors insisted that “uncollateralized, paper fiat money is great because you can print trillions of it without consequences” to boost the economy and stock market, Keiser, who hosts the Keiser Report on RT, explained.
Gold, they said, was a useless ‘pet rock’ you dig out of a hole and store in a vault. Now the tables have turned.
Now that the “black hole of debt created by endless money printing is starting to suck in huge portions of the global GDP,” these same people are “crying to gold for help,” he added.
The former stockbroker said current negative prices for oil and negative interest rates were also a “direct result” of “unchecked, boundless money printing.”
The “mirage” of a working economy backed by “worthless paper” is sustained by media propaganda and the willingness of regulators to ignore reality, he said.
To deal with the disaster of “trash fiat money” choking the global economy, a new gold standard will need to be introduced “and to make it work, we will see gold’s price top $10,000 per ounce.”
While gold has maintained its purchasing power for millennia, every paper money scheme invented for centuries “has either disappeared completely” or lost a huge amount of purchasing power, Keiser recalled.
Asked whether gold is the market’s safest asset in the current climate, Keiser said gold has been “the preeminent safe haven for thousands of years” but with the introduction of Bitcoin, there is a hard-money substitute for gold “that doesn’t require third-party verification, that’s more portable, and easier to use.”
As gold becomes harder to source, I predict many in the market looking for a safe haven will switch to Bitcoin.
As to whether gold is less risky than investing in stocks, Keiser said that stock prices are “entirely contingent” on open-market purchases by central banks using paper money – and when central banks collapse, stock values can “easily fall” by 80 percent or more.
“Gold does not have this problem,” he said.
Keiser also said that other precious metals, like silver, platinum or palladium, “move in concert” with gold, but none are as universally accepted.
“Only Bitcoin is equal to gold if you are looking for an alternative,” he said.
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