Macro guru and CEO of Real Vision, Raoul Pal, says gold appears poised to rise to higher prices, with one caveat.
In a new one interview on Wealthion’s YouTube podcast, the former Goldman Sachs executive tells SkyBridge Capital founder Anthony Scaramucci that while gold will likely move higher, its growth will pale in comparison to that of digital assets.
According to Pal, gold and crypto are both driven by monetary devaluation, which he believes will not go away because the US has incurred enormous interest on its debt.
“Gold is also driven by monetary depreciation…
I don’t think the basement is going away because we have to pay interest on debt and service existing debt, so gold is likely to go 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 further predicts that the endless devaluation of the currency will make recessions effectively impossible, saying that the 2020 recession would not have happened without the Covid-19 pandemic.
“I actually don’t think we can have a recession as a result of the depreciation of the currency. A recession is generally caused by credit events – it’s when your collateral falls too much relative to the debt, and that’s when the credit cycle comes into play.
But if you devalue the currency, the collateral doesn’t drop, so we don’t have a recession in 2022…
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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