Peter Schiff has a pretty dire outlook for the global economy. The gold bug and Bitcoin naysayer says that the Federal Reserve injecting capital into the US economy will spawn a crisis that will make the Great Recession look tame.
Despite being less than impressed with Bitcoin and its whole ‘digital gold’ narrative, Peter Schiff often sings from the same hymn sheet as cryptocurrency proponents. The CEO of Euro Pacific Capital says the Federal Reserve adding billions to the economy over recent months will drive the value of the dollar down and hard forms of money, such as gold, will become more attractive to investors.
Gold and the Weakening Dollar
In an interview with Kitco News, Schiff said that he sees no difference between the cash injections and the controversial policy of quantitative easing. He also claimed that the Federal Reserve is likely to continue creating money to bail banks out “pretty much indefinitely.”
For Schiff, the policy will weaken the dollar and encourage people to look for alternate stores of value. Perhaps the most vocal proponent of gold believes the shiny precious metal will benefit:
“I think the price of gold is going up next year, so I want to own it, but I don’t know how much is going to go up, but I do believe that once we really start to take off, gold can go from $1,500 to $2,000 very quickly.”
Schiff Puts Bitcoin on the Backburner
Turning his attention towards Bitcoin, Schiff said that he expects the price to continue declining from its high of almost $20,000. He added that he doesn’t think that the institutional money that many of Bitcoin’s most vocal supporters often claim is going to drive the next bull run is coming and that the store of value argument often cited is flawed:
“The original purpose of Bitcoin was to be an alternative to dollars or euros. It was supposed to be money… They tried to reinvent it as a store of value but there is no value in Bitcoin. You can’t store what you don’t have”
Interestingly, Bitcoin was developed and made public at the tail end of the 2007 to 2009 global economic downturn. The Genesis Block (the first Bitcoin block ever mined) even made a reference to the banking crisis included as a message:
“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”
Evidently, the kind of economic crisis that Schiff believes the Federal Reserve is provoking had an influence on Satoshi Nakamoto when they designed the planet’s first viable cryptocurrency. Although Schiff does not buy into Bitcoin as an improved version of gold — there are many that do. If this number continues to grow, it seems likely that the Fed’s attack on savings will encourage individuals to explore sounder alternatives to the dollar.