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8 Aug, 2018 04:41

Gold prices to jump after US loses trade war & its debt bubble blows – Peter Schiff to RT

Gold prices to jump after US loses trade war & its debt bubble blows – Peter Schiff to RT

Investors that bet on US economy against gold will soon be disappointed, and bullion prices will soar, according to veteran stock broker Peter Schiff, CEO of Euro Pacific Capital.

Gold prices have plunged this year from $1,400 to $1,200. Some say this happened because the US Federal Reserve raised interest rates, but Schiff has a different opinion.

“It happens because of a collective delusion of investors around the world that the US economy is actually booming (and it is not) and that the US can win the trade war (while it can’t). When the reality rears its head, I think that gold prices will head much higher than they are now,”Schiff told RT’s Boom Bust show.

According to Schiff, US economy was a bubble when Donald Trump was elected as president, but he has managed “to blow same air back in it”. However, the US stock market bubble has only been soaring, Schiff says.

“The tax cuts were a bit of an artificial stimulus, but the larger deficits the tax cuts produced would be a bigger drag on the economy than the temporary boost from the cuts,” he said. While introducing tax cuts, Trump is making the US government more expensive by signing bills on increased military and welfare spending, Schiff said.

“If taxpayers don’t pay for that with income taxes, they are going to do that by increasing debt, higher inflation and rising consumer prices. As the economy goes back to recession, it becomes obvious we are going to lose the trade war because we are now benefiting from the subsidies that foreign economies are extending to us by allowing to buy what they produce on credit,” he added.

This will end in a US dollar collapse, and people will rush to buy gold, Schiff concluded.

For more stories on economy & finance visit RT's business section