Run for the hills, they say! Sell all your gold, they say!
Who is “they,” anyway? If you want to know what you should do, listen to actual financial experts.
As we covered, Trump’s currency war with China is on the brink. The Economic Times reported that worries about the China-U.S. Trade war could lead to a technological cold war between the globe’s two largest economies, prompting more interest in the safe-haven investment gold. In May 2019, gold was settling higher as stocks were declining.
In April 2019, Forbes declared gold will outperform equities and bonds due to global equity corrections, wealth creation in emerging markets, a falling U.S. dollar, and rising political uncertainty. Any alarmist myths about a “gold crash” are moot.
Want proof? Here are some real expert opinions.
1. Alan Greenspan: Volatile Stock Market Will End the Bull Market
In December 2018, former Federal Reserve Chairman and Capitalism in America author Alan Greenspan told CNN claimed the bull market is beginning to fumble due to volatility and is unlikely to stabilize and take off again. Greenspan says the rise in long-term interest rates is putting pressure on stocks, which will weaken as rates continue to rise.
Greenspan predicts long-term rates will keep rising, and that we’re moving toward a period of stagflation, which is a combination of inflation and stagnation that causes the economy to weaken. He calls stagflation a “toxic mix” and has returned to his original stance, claiming gold as the “premiere currency.”
2. Judy Shelton: Gold Standard Is Needed to Fight Inflation
Judy Shelton, U.S. Executive Director of the European Bank for Reconstruction & Development and candidate for Trump’s Federal Reserve Board of Governors, wrote an op-ed piece for the Wall Street Journal titled, “The Case for Monetary Regime Change.”
In the piece, she writes that it’s worth considering linking a money supply to gold instead of relying on monetary officials setting interest rates. She continues that a linked system under gold would enable currency convertibility and mitigate inflation.
One of Trump’s top picks is advocating for gold. How likely could a gold crash be?
3. Peter Schiff: The U.S. Is Nearing a Great Financial Crisis
In May 2019, veteran stockbroker and CEO of Euro Pacific Capital, Peter Schiff, told RT the U.S. is on the verge of a greater financial crisis now than it was last year.
He says interest rates have no chance of normalizing, and balance sheets are going to balloon to new heights, a process that has been gaining momentum since early this year. That means gold will get a boost.
Bitcoin as “fool’s gold”
What about cryptocurrency? Schiff calls the cryptocurrency Bitcoin “fool’s gold.” He says it has none of the commodity properties of gold (which was a valuable commodity for centuries before it became money) and has no intrinsic value, making Bitcoin a Ponzi scheme.
Schiff compares Bitcoin trading to the Beanie Babies craze, but at least you can play with and admire Beanie Babies. You can’t do anything with Bitcoin except pray it’s worth trading.
4. Doug Casey: The Stock Market End Times Are Near
World-renowned investor, author, and founder of Casey Research Doug Casey wrote in November 2018 that gold continues to be the best form of money for reasons including:
- Gold is durable
- Gold can be convertible into larger and smaller pieces without losing value
- Gold’s quality is consistent and easily recognizable
- Gold is compact, portable, and convenient
- Gold is something people want and can use, in forms like jewelry
- Gold is something that can’t just be created out of thin air
In July 2018, Casey told StreetWise Reports our current economic climate is in a danger zone.
He predicts the next crash will be much worse, much different and much longer lasting than the Great Recession. Since many global governments looked to inflation as a solution to the last recession, we’re in for something far worse.
5. Jim Cramer: Gold Protects Against Economic Chaos
In December 2018, Jim Cramer, host of CNBC’s Mad Money, cited severe weakness in the economy, according to Market Realist. Feeling “powerless,” he cautioned the Fed on further tightening and said the current odds don’t favor stockholders.
Cramer says if the current course of tightening continues, investors should buy into the bull market in gold. In January 2019, Cramer said if investors want an insurance policy against volatility, gold is the way to go. As he’s been saying for years, the best way to protect yourself from economic chaos is to own gold.
Experts Agree About Gold’s Value
Financial experts agree: The stock market is much more likely to crash than gold — which, as history has shown, never will.
When the stock market crashes, a gold-buying panic is likely. Wise investors are already investing in precious metals before the imminent global economic catastrophe.
For more information on the future prospects of gold and precious metals, read our eBook The Future of Gold: An Investor’s Survival Guide.