Posted on 2020-02-09 18:53:00
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The price of gold, which hit its highest level in seven years, reaching almost $1,600 an ounce this week, will continue to rally, says veteran stock broker Peter Schiff.
According to him, gold bugs may see further gains thanks to Senator Bernie Sanders.
The Democratic Party 2020 hopeful’s chances are on the rise, a Fox News poll released on Sunday showed. It found that 23 percent of Democratic primary voters prefer the Vermont senator, up from 20 percent in December. He matched up favorably against President Donald Trump, leading 48 percent to 42 percent in a head-to-head matchup. Former Vice President Joe Biden remains the frontrunner for the Democratic nomination at 26 percent, but that is down from last month’s 30 percent.
“If Sanders becomes president in 2020, the price of gold will be well above $2,000 on the day after election night,” Schiff, the CEO and chief global strategist at Euro Pacific Capital, told FOX Business. The precious metal could reach $2,000 before the election if the market decides that Sanders is going to win, he said.
“What a Sanders win means is much bigger government deficits, and much more money printing by the Fed because there is no way to finance all of the spending that will happen with tax hikes on the rich,” Schiff said. “We’ll get tax hikes on the rich, but they’re not going to provide the revenue to pay for the programs.”
According to the economist, the US budget deficit will balloon even further under a Sanders presidency.
“There is going to be no Republican opposition to the deficits that would finance the spending because after all, the Republicans didn’t object to record deficits under Trump when the economy was supposedly the greatest ever,” Schiff said. “The deficits could be three or four trillion dollars a year and the money printing will be off the charts.”
According to him, “There’s no way the dollar’s reserve status will survive a Sanders presidency.” He says: “America is going to be a much, much poorer nation. Our standard of living is going to implode, but the money printing is going to be crazy.”
Talking about the China coronavirus, Schiff said that gold was rallying before the outbreak and that it is “not why” the price is going up even though metals are considered a safe-haven amid uncertain times.