A major US investor has predicted the world’s leading economy will return to the gold standard within two years, giving further weight to Republican moves to set up a commission to look at the issue.
Peter Schiff, chief executive of Euro Pacific Capital, has argued that the US is heading for a currency crisis, and an immediate move to peg the dollar to gold is needed as the economy is caught in a “phony recovery”.
“Eventually we will be back on a gold standard, not because politicians want it, but because the public demands it and the situation requires it,” he told King World News.
“We are headed for a currency crisis, and the only way we’re going to stop it is by putting real value back into the paper dollar. So we have to tie it to gold.
“The sooner we do it the better because the sooner we start to repair the problems the easier it is. The longer we wait, the bigger the problems get. But I think it’s happening soon [a return to the gold standard], in a year or two.”
The economy is so bad, Mr Schiff argues, that despite Ben Bernanke’s speech today in which he is expected to dampen hopes of further monetary policy stimulus, the Federal Reserve chairman will soon be forced into another round of quantitative easing.
“QE3 is coming. You know we’ve got a phony recovery, so it’s going to fail. So we are going to get more QE. It’s not that we need it, but if we don’t have QE3, then we are back in recession,” said Mr Schiff, who ran as a candidate in the Republican primary for the US Senate seat in Connecticut in 2010.
“We have a lot of problems, and if we cure them it’s going to mean a short-term recession as we repair the damage. Until the Fed lets us have a real recession, as painful as that may be, we are never going to have a recovery.”
Telegraph has the full article
