Macro guru and Real Vision chief executive Raoul Pal says that gold looks primed to rally to higher prices with a caveat.
In a new interview on the Wealthion YouTube podcast, the former Goldman Sachs executive tells SkyBridge Capital founder Anthony Scaramucci that while gold will probably go higher, its growth will pale in comparison to that of digital assets.
According to Pal, gold and crypto are both driven by monetary debasement, which he doesn’t envision going away as the US has racked up a huge interest bill on its debt.
“Gold is also driven by monetary debasement…
I don’t think the basement goes away because we’ve got to pay the interest on the debts and service the existing debts, so gold probably goes higher. I just like gold less than crypto because it’s a similar trade but crypto has a much, much higher beta and a higher risk-adjusted return – but gold should be fine.”
Pal goes on to predict that endless currency debasement will essentially make recessions impossible, saying that the 2020 recession wouldn’t have happened if it weren’t for the Covid-19 pandemic.
“I actually don’t think we can have recessions because of debasement of currency. A recession is really triggered by credit events generally – it’s when your collateral goes down too much versus the debts and that’s when the credit cycle plays in.
But if you debase the currency, then the collateral doesn’t go down, so we didn’t get a recession in 2022…
Now if I go back and be honest with myself, I don’t think 2020 would have been a recession without a pandemic either.”
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