Raoul Pal, a well-known financial expert and CEO of Real Vision, recently shared his outlook on gold and its potential for growth. While he believes gold prices will likely rise, he thinks other investments, particularly cryptocurrencies, offer even greater returns.
Gold’s Rise Tied to Currency Debasement
Pal’s prediction is based on his view that ongoing currency debasement will continue to drive up gold prices. He argues that the US’s massive debt and interest payments make this debasement inevitable. He stated, “Gold is 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.”
Crypto’s Higher Potential
However, Pal favors cryptocurrencies over gold. He believes crypto offers a higher potential return, although it also carries significantly more risk. He explained that while both assets benefit from currency debasement, crypto’s higher “beta” (a measure of volatility) translates to potentially greater rewards.
Recessions and Currency Debasement
Pal also shared his thoughts on the relationship between currency debasement and recessions. He believes that the continuous debasement of currency essentially prevents recessions from occurring. He argues that the 2020 recession was largely due to the pandemic, not economic factors, and that without the pandemic, a recession wouldn’t have happened. He further suggested that the lack of a recession in 2022 was also due to currency debasement. He explained that recessions typically result from credit events, where the value of collateral falls below the level of debt. However, currency debasement prevents this from happening by inflating the value of the collateral.
Disclaimer: This information is for general knowledge and discussion purposes only and does not constitute investment advice. Always conduct thorough research and consult with a financial advisor before making any investment decisions.
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