Peter Schiff: Gold is hitting $13,000 in the long-term

Peter Schiff, CEO of Euro Pacific Capital, says money printing and government debt will lead gold to reaching $13,000 in the long-term.

Schiff, who has had made bold predictions regarding the yellow metal in the past, made this remark in the extensive hour-long video with Mike Maloney. He believes a hyperinflationary environment driven by the Federal Reserve’s easy money policies will drive the price of gold to $13,000 in the future.

Of course, there will be many skeptics of Schiff, citing his past predictions of gold reaching $5,000 and hyperinflation. But Money Morning does a great job explaining just exactly why we haven’t seen an enormous amount of inflation in the United States economy, though price inflation is quite prevalent (SEE: 15 statistics to show 2014 was the year of price inflation). The blog looked at a “balance sheet recession.”

“In a balance sheet recession, households and firms use extra money to pay down debt, as opposed to making purchases on consumer goods. The classic definition of inflation as ‘too many dollars chasing too few goods’ breaks down when the economy is not ‘chasing goods.’ Instead it’s redirecting that money to reduce debt.

“When there simply isn’t enough economic activity and consumer loan demand is stifled, no amount of quantitative easing or government spending is going to get money moving around in a way that stokes inflation/hyperinflation.”

The bestselling author of “Crash Proof” and “How an Economy Grows and Why It Crashes” urged investors to protect themselves by being early and being patient. By instilling these practices into your investing strategy, says Schiff, you will be safe when the financial crash does transpire.

“We’re on a precipice of something huge, and you’ve got the powers that be telling us everything is great, and there’s nothing to worry about. But there’s a lot to worry about, and people have to do what they can on their own to protect themselves.”