The US Federal Reserve is backed into a corner after creating a messy and untenable situation.
That’s according to Larry Lepard, investment manager and managing partner at EMA. Speaking to the Investing News Network, he said that the central bank’s rapid hiking of interest rates is stressing the monetary system in ways that are still not being fully felt.
The banking crisis in the US earlier this year is one way that stress has come home to roost, but Lepard sees many more problems ahead. In his view, the bond market may be the next area of concern given the vast amount of debt the US is carrying.
“We’ve really kind of gotten ourselves into one hell of a mess, and the Fed is really pretty well trapped,” he said during the interview. “I think the implications for that are that one needs to hold sound money assets in spite of the fact that until rather recently they weren’t looking all that great because of the Fed’s tightening campaign.”
As Lepard explained, he places gold, silver and Bitcoin in the sound money basket, and he sees prices for all three of these assets rising substantially in the years to come. In his view, they can and should coexist in investors’ portfolios.
He noted that gold and silver prices have held up well, and explained what it will take for them to move higher.
“I strongly believe that gold will take out US$2,100 (per ounce), and it will rip to US$3,000 when the first hint of the next easing occurs, and I think that’s not very far away,” said Lepard. “And then of course silver is gold on steroids as we all know — I think silver will go through US$30 (per ounce) easily and then on its way to US$50 and then through US$50.”
He acknowledged that Bitcoin comes with more volatility and said he realizes that many precious metals investors aren’t fans of the cryptocurrency. However, given its potential for asymmetric gains in the face of the problems he sees coming, he views Bitcoin as an important asset for the future. “The only wrong allocation to Bitcoin is zero,” Lepard said.
Overall he’s anticipating an economic debt doom loop to unfold in the US in the not-too-distant future.
“When is it going to happen? A lot of people ask me that,” he said. “I don’t know — I think we might have complete fiat failure by as early as 2030, which is seven years away. But it could happen even earlier.”
Watch the interview above for more from Lepard on gold, silver, Bitcoin and the overall market.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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Image and article originally from investingnews.com. Read the original article here.