Chen Lin, Founder of Lin Asset Management, says the Fed will eventually have to give up. Brent Cook, Founder of Exploration Insights, predicts that more countries will start putting gold in their reserves. John Kaiser, Founder of Kaiser Research Online, claims that the dollar will lose its reserve currency status. We have prepared the opinions of famous names about the markets and gold for our readers.
That’s when gold will rise so hard
Chen Lin, Founder of Lin Asset Management, says the US economy may already be in a recession. He also notes that the second quarter Gross Domestic Product (GDP) announcement will be the most important indicator. Chen Lin states that the price of gold has historically led to economic and stock market rebounds. In addition, he says this time should be no different:
When do we come out of recession? I think, one day, the Fed will finally blink. They’ll say, ‘We can’t tighten it up like this anymore’. That’s when gold will rise very sharply. That’s when we’ll start coming out of the recession.
Fed, inflation and markets
cryptocoin.com As you follow, the Fed last increased interest rates by 75 basis points. Lin says the Fed lacks the ability to raise interest rates to a level that will adequately combat inflation. He cites former Fed chair Paul Volcker. Volcker had raised the fed funds rate to 20 percent in 1981 to combat double-digit inflation. Chen Lin makes the following statement:
People are talking about Paul Volcker. But it was appropriate for the time. The United States has $30 trillion in debt. Just think how many trillions we’d pay each year in interest if interest rates go up, even if it goes up to 4%. Then the noise will go away. So, I don’t think the US will do that. Nor do I foresee that the interest rate could go to the significant highs needed to crush inflation.
“Gold rises first, then the economy improves”
While gold did not perform well during the recession, it could be a leading indicator that the recession is over. Chen Lin, the owner of this thought, comments:
In every recession, every drop in the stock market, gold is always the first to come out of it. Even for investors who are not interested in gold, watching the price of gold can give some direction as to where the market will be in the next few weeks or months. Gold rises first, then the economy improves.
“We will see more countries start putting gold in their reserves”
Brent Cook, Founder of Exploration Insights, says copper, nickel and gold will be the best assets to own as commodities enter a ‘recap’ phase. Cook notes that gold will benefit from recent geopolitical events and makes the following assessment:
When Russia invaded Ukraine, US dollar reserves were confiscated. The rest of the world saw this. And I think we’re going to see more non-Western countries start putting gold in their reserves instead of US dollars. It will be within this year. So I think this is also positive for gold.
“This is where the real price of gold will evolve”
John Kaiser, Founder of Kaiser Research Online, shared his views on the market at the PDAC 2022 Convention in Toronto. Kaiser says gold will rise as the US dollar loses its status as the world’s reserve currency. He also states that China and Russia will form an axis of Eastern economic power. In this context, he comments:
The US dollar will not be used on the China-Russia axis. They will break the hegemony of the US dollar. It’s not something that happens overnight, it’s not black and white. It will be something transitory. And I think this is where the real price of gold will evolve.
John Kaiser: Gold is an ‘insurance policy’ when chaos strikes
Kaiser states that the US is moving towards authoritarianism and gold is a safe haven as political uncertainty increases. Kaiser says that gold is “stored energy,” while crypto is an “energy obligation.” Because, he adds, “one has to consume electricity to keep all these Blockchain transactions going.” He states that gold is an “insurance policy” when “chaos erupts”. However, he notes that he does not see it as a form of money. Kaiser makes the following statement on the subject:
It’s what you can easily use to buy assets whose cash value suddenly drops. Whereas, to get cash, you have to sell gold first. That’s why gold is an asset class. It’s not actually money.
“US dollar will lose its reserve currency status”
John Kaiser thinks like Brent Cook. He says the dominant international currency, the US dollar, will lose its reserve currency status. He states that the center of economic and political power has shifted to the East, leaving the USA behind. Kaiser explains his views as follows:
The concept of globalization, which has governed everything for the last thirty years, with the US dollar at its centre, is now falling apart. By 2027, China’s economy will be nearly as large as America’s. Convergence is happening faster than anticipated. That’s why countries are looking for payment in other currencies such as the renminbi and the ruble. This will break the hegemony of the US dollar.
