The chances of a Sanders presidency are on the rise, according to a Fox News poll released Sunday which showed 23 percent of Democratic primary voters prefer the Vermont Senator, up from 20 percent in December. The poll found that former Vice President Joe Biden remains the frontrunner for the Democratic nomination at 26 percent, but that was down from 30 percent last month. Sanders matches up favorably against President Trump, leading 48 percent to 42 percent in a head-to-head matchup.
“If Sanders becomes president in 2020, the price of gold will be well above $2,000 on the day after election night,” Peter Schiff, chief executive officer and president of the Westport, Conn.-based Euro Pacific Capital told FOX Business. He added that the precious metal could reach $2,000 before the election if the market thinks Sanders is going to win.
“What a Sanders win means is much bigger government deficits, and much more money printing by the Fed because there is no way to finance all of the spending that will happen with tax hikes on the rich,” Schiff said. “We’ll get tax hikes on the rich, but they’re not going to provide the revenue to pay for the programs.”
Schiff believes the U.S. budget deficit, which was up 11.8 percent through the first three months of this budget year to $356.6 billion and on track to top $1 trillion for the first time in eight years, would balloon even further under a Sanders presidency. He is also promising to cancel more than $1 trillion of U.S. student debt and has also been a proponent of other massive spending projects like the Green New Deal.
“There is gonna be no Republican opposition to the deficits that would finance the spending because after all, the Republicans didn’t object to record deficits under Trump when the economy was supposedly the greatest ever,” Schiff said. “The deficits could be three or four trillion dollars a year and the money printing will be off the charts.”
As for the coronavirus and any potential impact it might have on the price of the precious metal, Schiff says that gold was rallying before the outbreak and that it is “not why” the price is going up even though metals are considered a safe-haven amid uncertain times.
Analysts at J.P. Morgan examined the 2003 outbreak of SARS, and found gold’s price rose by more than 8 percent in the two-and-a-half months after the World Health Organization issued an emergency travel advisory in mid-March, but said the U.S. invasion of Iraq and an easing cycle by the Federal Reserve “muddy the water immensely.” They say gold will hit $1,655 and possibly even $1,715 based on the technical set up.
Looking ahead, gold investors will be paying close attention to the Federal Reserve’s upcoming two-day policy meeting which concludes on Wednesday.
While the central bank is expected to keep rates unchanged, investors will be focused on any commentary regarding the expansion of its balance sheet by about $400 billion over the past few months through short-term repo operations and the purchase of Treasury bills.
Schiff thinks the Fed will cut rates back down to zero at some point in the future, and that its balance sheet will “explode to a much higher than the four-and-a-half trillion that they tapered from.”
“There’s no way the dollar’s reserve status will survive a Sanders presidency,” Schiff said. “America is going to be a much, much poorer nation. Our standard of living is going to implode, but the money printing is going to be crazy.”
- Source, Fox News
