- The Federal Reserve's monetary tightening could lead us into a"recession that we don't recover from for a couple of years," said John Hathaway, Senior Portfolio Manager at Sprott Asset Management.
The past year has witnessed the highest inflation in forty years. Headline inflation was 8.3 percent in August, while core inflation, which excludes food and energy, was 6.3 percent. Currently, the Federal Funds Rate's target range is between 3 and 3.25 percent. Hathaway spoke with David Lin, Anchor and Producer at Kitco News, at the Precious Metals Summit at Beaver Creek, Colorado. Public Debt Constraints
"Every 1 percent rise in the interest rate paid on that $30 trillion of debt adds $300 billion to the budget deficit," he said."There are real constraints."Inflation hedging is not the only reason to hold gold, said Hathaway, who said that gold hedges against broader "systemic risk." "If you look at long spans of time, I would say that gold has kept up with inflation, but I don't think that's a reason to own it," he said.