Loading ...The mainstream is a fickle place.
On the one hand, we had Bank of America raising its 18-month price projection for gold to $3,000. On the other hand, some people argue the price of gold could crash later in the year.
Goldis up over 13% on the year, but the yellow metal has seen some price pressure over the last couple of days as various government agencies have started to move toward reopening the economy.
An article published by CCNoffers three reasons gold could “crash to earth” in the coming months – none of them particularly compelling.
- A coronavirus vaccine.
- A quick economic recovery
- Deflation and a soaring dollar
The first two reasons both embrace the mainstream narrative that the economy was great before the pandemic and that it will quickly go back to “normal” as soon as governments open things back up again. But there is no normal to go back to. The economy wasn’t normal before the pandemic.
Coronavirus was merely the pin that popped the economic bubble. Everybody is still fixated on the pin, but getting rid of it doesn’t stop the air from coming out of the bubble. A coronavirus vaccine would ease the pandemic, but it wouldn’t do anything to address the malinvestments and debt that were already rampant in the economy before coronavirus reared its ugly head.
And it will take months for the impacts of all of this Fed money-printing to work its way through the economy. In a nutshell, deflation is not the worry here. And the dollar isn’t likely to soar. In fact, Peter said people will likely 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.”
https://schiffgold.com/commentaries/gold-is-set-to-crash-no-way/