Summary: As far as gold bugs go, Jim Rickards can be considered one of the top. As you likely know, gold plummeted over 13% in just two weeks. A report from Societe Generale discusses how a perfect storm of improving macroeconomic indicators could collide to drive gold lower – central to their argument is the some expectation that interest rates will rise and the Fed will begin to scale-back its quantitative easing programs later this year.
In an interview with Business Insider, Rickards explains that he would turn bearish on gold if:
Well, if the President and the Chairman of the Fed came out and said, “We’re going to raise interest rates, we’re going to stop quantitative easing — in fact, we’re going to reverse it a little bit — we’re going to cut corporate taxes
to zero, we’re going to eliminate the capital gains tax, we’re going to reduce regulation, we’re going to make America a magnet for savings and investment. We’re going to have an investment-driven model rather than a debt and consumption-driven model, and we’re going to have positive real rates.”
I would say, “Great. Sell your gold, or put it to one side, because gold is over.”
But none of those things are true. Not one of those policies that I just mentioned is on the table.
In fact, the opposite is true. We’re getting higher taxes, more regulation, more quantitative easing, zero interest rates as far as the eye can see.