In a recent interview with Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News, Michael Lee, who is the founder of Michael Lee Strategy, said that he believes the gold price will reach $5,000 an ounce within three years. He attributed this to the fact that the U.S. economy is already in recession and that a wave of defaults will soon follow.
He explained that the yield curve has inverted, which is a reliable indicator of a recession. He conjectured that a wave of defaults is likely to follow the recession because many businesses and consumers are already overleveraged. He compared the recession to the 2001 recession, which was a 2-year downturn that caused the gold price to rise.
He stated that the gold price is still below the key psychological level of $2,000 an ounce because banks and other financial institutions are manipulating the market.
“One has to wonder how gold has not broken out materially above $2,000 given the amount of buying that these BRICS nations are doing at the moment. With silver, you’re finally seeing some JPMorgan traders go to jail for what they did 15 years ago in containing the price of silver … Is there something like that going on in the gold markets to artificially deflate the price? When all these stars line up, and the price of something should be much higher, your mind just goes to these conspiracy theories because so many have become true over the last few years.“
He speculated that China and Europe are the first two countries that are likely to experience a flight to safety, which will drive up the gold price. He opined that gold is a good investment for the long term because it is a hedge against inflation and economic turmoil.
He also questioned whether the labor market data is being reported accurately. He said that every single time a report came out this year, it was later revised lower. He said this is a 12 sigma deviation event, which means it is extremely unlikely to happen by chance. He asked whether this is due to government bureaucracy, a flawed model, or the Bureau of Labor Statistics cooking the books to favor the Biden administration.
“Every single time a report came out [this year], it was later revised lower. That has happened every month this year. That is a 12 sigma deviation event — meaning, you’re more likely to get struck by lightning five times on the way to work than this happening … You have to ask yourself, is this government bureaucracy, is this a flawed model, or is the Bureau of Labor Statistics cooking the books to favor the Biden administration?“
Lee also said that he thinks the Fed is making a mistake by raising interest rates. He said that this will only slow down the economy and make the recession worse. He said that the Fed should focus on getting inflation under control, but that they should do it through other means, such as quantitative easing.
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