Gold will skyrocket, according to Michael Lee, Founder of Michael Lee Strategy and a 20-year Wall Street veteran who previously served as Vice President at Morgan Stanley. For this reason, Lee allocates a significant share of the portfolio to gold.
“Gold is on the verge of a breakout of up to $5,000!”
According to Wall Street veteran Michael Lee, gold will reach $5,000 in the next bull run as inflation rises and the US dollar weakens. Lee says he will add 15% gold to his portfolio. In this context, Lee shares the following predictions:
We are on the verge of a breakout where gold can reach as high as $5,000. I think the dollar is approaching the top. When you see the dollar reversal, you can see that gold really starts to rise once it rises above $2,000. Given the amount of money we’re printing, I have no idea why gold isn’t above $4,000 right now.
“You become a banana republic when your currency is worthless”
Michael Lee suggests the role of gold as an inflation hedge. cryptocoin.comAs you follow, the latest headline Consumer Price Index data shows that the annual inflation rate, which was 7.1% in November, dropped to 6.5% in December. The Federal Reserve increased interest rates by 425 basis points last year to curb high inflation, which peaked at 9.1% in June. Lee argues that if the Fed fails to get inflation under control, it will ‘tear apart society’. In this regard, he makes the following statement:
Knowing the dangers of inflation, the Fed will likely go overboard with its restrictive policy. You become a banana republic when your currency becomes worthless.
“Fed pivot unlikely!”
“Those who claim that the Fed will soon return from its restrictive policy stance are fuming,” says the Wall Street veteran. He explains his views on this matter as follows:
There’s a lot to be done before the Fed becomes accommodating and truly pivots and begins to cut back. If the Fed cuts too soon or reverses the tide too soon and we hit a double peak in inflation, think about the devastation… Think about how little credibility the Federal Reserve is as an institution right now, and the less credibility they’ll have if that happens.
Lee claims the Fed will need to ‘squash demand and cause a recession’ to push inflation to its 2% target and will not pay attention to downtrends in the markets. He then makes the following statement:
The Fed won’t give up on its 2% target as it hurts the S&P 500. Gone are the days when Fed executives bought and sold their own personal accounts based on announcements to inflate the S&P 500… From the way the bond market reads, I don’t think we’re going to get this pivot until we have a pretty ugly recession.
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