Gold prices may skyrocket to $10,000 per ounce if Vice President Kamala Harris secures victory in the upcoming U.S. presidential election, warns Peter Schiff, chairman of SchiffGold and chief market strategist at Europe Pacific Asset Management.
“If Kamala Harris becomes president, we have no chance of fixing the economic problems,” Schiff stated. “National debt will soar exponentially, potentially hitting $50 trillion during her first term, as we add $4 to $5 trillion in debt annually. Harris will likely blame the government’s issues on capitalism and use it as a pretext for implementing socialist policies,” he added.
Schiff highlighted the declining dominance of the U.S. dollar as a global reserve currency as a key driver of a potential surge in gold prices. According to Schiff, it’s uncertain whether the dollar could retain its status through even one term of a Harris administration. He warned that U.S. creditors might lose confidence in the country’s ability to meet its financial obligations. “The debt is simply too large, and creditors will realize we cannot pay back what we owe,” Schiff said.
Debt Crisis: Default vs. Inflation
Schiff suggested that a default on U.S. debt would be a better alternative than inflating it away. “A default is the most responsible way to address this debt issue,” he argued. “If politicians avoid default, they will resort to inflation, which is far worse for creditors and everyone holding dollars. A U.S. default could see creditors paid back a portion of the debt, but inflation might wipe out 90% or more of their investments,” Schiff explained, warning of a possible hyperinflation scenario.
Gold’s Path to $10,000
Schiff also predicted that gold’s price could quadruple from its current level to reach $10,000 an ounce. He pointed out that between 2001 and 2011, gold surged by more than that amount. “Gold has only just begun its ascent, breaking past resistance levels. We’re likely to witness a sharp increase, similar to the move from $300 to $1,900 per ounce, but in a shorter time frame,” Schiff said.
Fed’s Monetary Policy and Gold
Schiff emphasized that the Federal Reserve should be paying closer attention to rising gold prices as an indicator of economic health, rather than relying on traditional macroeconomic data. He criticized the Fed for its focus on flawed data ahead of its September monetary policy meeting. “The Fed claims to be data-dependent, but it’s using outdated, often revised data. The most important signal is the price of gold, which has recently hit record highs,” Schiff noted.
In the weeks leading up to the September 18 meeting, spot gold surpassed $2,500 per ounce, marking an over 21% increase year-to-date. Schiff pointed out that the Fed’s policies are not restrictive enough, citing rising gold prices as evidence. He warned that Fed rate cuts could further damage the U.S. economy.
Historically, previous Fed Chairs have used gold as a critical indicator for monetary policy. Schiff referenced Alan Greenspan, former Fed Chairman, who monitored gold prices to assess whether monetary policy was too loose or too tight. “If gold is at a record high of $2,500, it’s a clear signal that monetary policy is too loose,” Schiff said. He warned that Fed Chair Jerome Powell’s planned rate cuts are a mistake, and that’s why gold prices are likely to continue climbing.
