Peter Schiff, the CEO and chief global strategist of Euro Pacific Capital ups the ante on his criticism of CNBC for dismissing gold, and promoting Bitcoin. Moreover, he also suggests that we’re in the age of a financial bubble of abnormal gains.
It happened after a media report that seems to dismiss Gold as an investment due to perceptibly less gains than other assets.
Citi Banks’ recent call of $2000/ounce gold price projects a growth of 25% from current levels at $1600.
A CNBC anchor responded to Citi’s call that # will hit 2K in the next 12-24 months by dismiss the potential as being too low a return to matter. That’s a 25% gain in less than 2 years! In contrast a 2-year Treasury yields just 1.4%, and the S&P yields 1.7%. New low for CNBC!
However, the 1.7% S&P 500 returns is overly exaggerated. According to ycharts data, the the long term average 2-year return of S&P 500 is 12.27%.
Moreover, the gains from Q3 2019 has now driven the stock market to All-Time High (ATH). Hence, the gains are well above average at the moment.
Furthermore, between Gold and Bitcoin, the increase in Bitcoin has been way higher than gold. Nevertheless, the volatility
Decade and Yearly Increase in the Two
The increase in gold in the last decade has been at 50.96%. Since the beginning of 2020, it has gained 8.7%. The All-Time High is gold is around $1920.
Whereas, the gains in Bitcoin have been astronomical since it’s inception in late 2008. While the decade rise in BTC has been beyond imagination around 9500% (beginning with price at $1/BTC), the yearly gains in Bitcoin is at 46%, currently. The increase in Bitcoin is nearly 6 times in 2020 alone.
Moreover, the increase in S&P 500 since 2010 has been around over 211%. Schiff argues that we’re in a massive financial bubble. One which is driven by historically low interest rates and huge supply of FIAT currency.
The argument around bubble characteristics has a lot of weight around it due to increasing debt. However, the Governments are currently undergoing massive deleverage in the aftermath of 2008. And, the forces of capitalism continue to dominate global economy.
Which asset do you think will lead in the current decade? Please share your views with us.