Gold is cheap; prices to hit $5,000 in medium-term, says economist – by David Lin (Kitco News – April 7, 2020)

(Kitco News) – Gold prices could climb to $5,000 in a few years, this according to John Butler, author of “The Golden Revolution.” Butler attributed this price growth to the longevity of loose monetary and fiscal policies that will come as a result of COVID-19, as well as gold’s historical performance during periods of declining economic growth.

“Based on the historical pattern of the 1970s, and stagflation, and other times these sorts of things have come about, I think gold is going to rise, by orders of magnitude,” Butler told Bilal Hafeez on the Macro Hive podcast. “I think it is perfectly realistic to see gold closer to $5,000 than where it is today in a few years’ time.”

On the lasting effects that the pandemic will leave on the economy, Butler said that policy reforms are here to stay. “Politicians jump on whatever opportunity to try and push their pet agenda forward, and in some cases, it might be a very well-meaning program and in other cases it might be a way to try to increase their power and influence.

I see all of the above right now,” he said. “The other thing is what Milton Friedman said decades ago, [which is that] there is nothing more permanent than a temporary emergency government program.”

Although gold has already hit historically high valuations, Butler said that simply looking at the price in nominal terms may not give the full picture. “You have to ask yourself the question ‘is the nominal price of gold really that meaningful?’

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