The managing director the commodities research firm, CPM Group says a new global recession is imminent and when that depression arrives, gold will undoubtedly ascend to new all-time highs.
Speaking yesterday (Thursday), Jeff Christian says spiralling government debt is one indicator that a recession could arrive sooner rather than later, given the huge amounts of money that nations around the world are pumping into markets to stay afloat during the COVID-19 pandemic. As a longstanding hedge against risk and a recognised safe harbour during times of economic turmoil, gold will naturally benefit from a recession. Previous recessions have boosted gold substantially, and with the precious metal stronger than ever in the wake of the pandemic, it’s likely we’ll register highs not yet seen before.
Christian said, “We’re going to have more recessions. You can’t predict when a recession is going to hit, or how big or how deep it’s going to be, but you can predict, with 100% certainty, that there will be future recessions, it’s just the nature of economics. When the next recession hits, what’s going to cause it? Probably some problem in the debt market or something else….and when you have that something scaring people and throwing the world into a recession, they will buy gold.
“Debt and deficit spending are the number one economic problems. The second thing is real GDP. We’re in a strong recovery right now because we had a really terrible 2020, so you’re seeing strong numbers being posted. The IMF has just increased its estimates for real GDP in 2021. That’s a rebound and our expectation for 2021, 2022, you’re going to see a rebound and a recovery, but you have ongoing deficit problems, you have excess manufacturing capacity, now you have excess retail capacity. You have excess commercial real estate, and you have excess labour.”
Buy now to be in strongest position possible to benefit when prices elevate.